By risk, we primarily refer to financial risk for the investment strategy and the targets in question. 

This involves two key parameters:

  • The probability of losing capital
  • The volatility of returns

We address these and try to minimize risk to a minimum by:

  • Selecting targets with large economic moats (that is quality businesses)
  • Hiring managers whose primary set goal and proven expertise is widening the economic moat
  • Introducing highly incentivized and profit-oriented compensation
  • Keeping capital allocation within our control
  • Buying into quality businesses at prices incorporating margins of safety compared to their intrinsic value