Frequently Asked Questions
What services do you provide?
Heron Bay Capital Management, LLC (HBCM) provides asset management services to institutions and private clients. Our research team manages investment strategies, and our client relationship team works with private clients to provide financial planning and tailor asset allocations using our strategies based on each client’s circumstances.
What is your investment style?
HBCM is a concentrated, active investment manager that employs a quality-first, value-oriented investment style. The research team generally seeks companies with strong balance sheets, cash-generating business models, competitive advantages, and management teams with demonstrated capital-allocation experience. During the research process, the investment team develops an estimate of intrinsic value to help guide investment decisions. This contrasts with purely multiple-centric definitions of value that accounts for pragmatic growth. We utilize best practices in quantitative and bottom-up research processes to identify investment opportunities.
How do you define and manage risk?
In an increasingly inefficient market, volatility is not an appropriate measure of risk. Rather, we believe that risk is a permanent destruction of funds. To protect against this, we have designed an elaborate research process that has many layers of risk management: The investment team includes professionals with varied educational and professional backgrounds and operates with a relatively flat decision-making structure.
Team members conduct independent stock research, which is intended to encourage multiple perspectives and reduce groupthink. Portfolio construction decisions require agreement among the members of the investment team responsible for the strategy. Investments that meet HBCM’s quality and intrinsic-value criteria generally combine characteristics that help limit exposure to excessive leverage, speculation, and high valuations.
Each portfolio is constructed around equal-weight position sizing, which differs depending on strategy. This allows the investment team to subjectively size positions based on conviction. Positions are allowed to grow to 3x equal weight before mandatory risk-based trims take place.
Portfolios are generally managed with attention to diversification of underlying business and end-market exposures rather than solely by reference to sector classifications.
For private clients, HBCM may use multiple strategies based on the client’s financial plan, objectives, circumstances, and assessment of risk.
What are Heron Bay’s key differentiators?
HBCM was intentionally built as a boutique investment firm. We believe a focused structure can support direct communication, avoid unnecessary bureaucracy, stay aligned around our investment process, and disciplined research. This structure is intended to support our research culture, long-term orientation, and service to clients whose objectives and expectations are consistent with our investment approach
What strategies do you manage? What is the minimum investment?
HBCM actively manages Large Cap, Large Cap Select, and Small-to-Midcap (SMID) equity strategies. HBCM reports strategy performance to selected third-party institutional databases. For private clients, HBCM may also use other asset classes and diversifying strategies as part of an individualized asset allocation. The stated minimum investment is $1 million, although HBCM may accept a lower amount in its discretion. Strategy availability, terms, and minimums are subject to change.