Our investment process is one that is collaborative and collegial. We employ our quality criteria to assemble a Focus List of companies (generally 50 to 60 companies) that we may like to own at an attractive valuation. From this list, we construct a portfolio of what we believe to be our best 20-25 ideas. Embedded in our investment culture is a focus on generating new names, constantly evaluating opportunities while testing the conviction among existing portfolio holdings.
Our team is nimble, close-knit, and experienced, which allows us to quickly mobilize around ideas and arrive at investment decisions as opportunities arise. We execute our research in a consistent, repeatable manner and strive to allocate our time and effort on value-added activities.
In a world where information is ubiquitous, we believe the process of conceptualizing an idea is one where we can add value. Conceptualization defines the investment story and how our view is unique from the consensus, and drives the research process by focusing the team on what matters.
Once an idea is conceptualized, a research point person is assigned and the entire team immerses itself in understanding key company issues. This generally includes reviewing financial statements, SEC filings, management presentations, interviews, competitor profiles, customer commentary and other information. This work either supports or refutes the investment concept, and informs our Focus List assumptions for long-term growth, terminal valuation and an appropriate discount rate.
Given that the investment team is engaged in the process from the beginning, and communication is ongoing, the portfolio decision becomes clearer as our work progresses. While all team members have input into the process, the CIO makes the ultimate investment decision. We seek to apply our decisions across all accounts with the goal of minimizing dispersion and providing a similar client investment experience over time.
HSMP’s replicable investment process effectively bridges the conceptualization of a new idea to its commercialization in a portfolio decision.
Investing in securities involves significant risks, including the risk of loss of the original amount invested. Some material risks applicable to our investment strategy include (listed alphabetically): Active Management Risk, Concentration Risk, Equity/Foreign Securities Risk, General Economic and Market Conditions Risk, Liquidity Risk and Market Capitalization Risk. This does not list every potential risk associated with our investment strategy. See material risks applicable to our investment strategy and important information and disclosures regarding our Firm at www.hsmanage.com/disclosures/ and our Firm Brochure (at www.hsmanage.com/documents/ or upon request at 212-888-0060. There can be no guarantee that investing with us will be profitable. Past performance is not indicative of and does not guarantee future results.