Institutional Strategies
Investment PhilosophyQuality and Intrinsic Value
As bottom-up active investment managers, we focus on preserving and growing clients’ capital across economic and market cycles. To accomplish this task, we focus on owning high-quality businesses that are trading at a discount to their intrinsic value. The combination of quality and valuation presents opportunities for long-term appreciation as well as downside protection in difficult markets, without a reliance on macroeconomic judgements.
The tenets of our investment philosophy are:
- Active management - Concentrated portfolios most effectively manage risk while positioning for appreciation.
- Resilience – Quality businesses have staying power due to their advantages relative to competitors, offering long-term compounding opportunities.
- Risk - Risk is the permanent impairment of capital, not volatility. Risk is managed through stock selection and asset allocation.
- Long-term - Invest with a long-term mindset, embracing the “time arbitrage” in this increasingly myopic world.
- Disciplined – Our equity portfolios are built using repeatable quantitative and qualitative investment processes that focus on cash flow generation, resource efficiency, and intrinsic value.
Heron Bay Capital Management, LLC claims compliance with the Global Investment Performance Standards (GIPS®)
U.S. Small & Mid Cap (SMID)
U.S. Domestic equities with market capitalization between $5 billion and $20 billion.
20-30 Businesses
>95% Active share relative to Russell 2500 Index.
U.S. Large Cap
U.S. Domestic equities with market capitalization typically over $20 billion.
30-35 Businesses
>80% Active share relative to S&P 500 Index.
U.S. Large Cap Select
U.S. Domestic equities trading at a valuation discount after adjusting for risk, accounting manipulation, and base level of quality.
10 - 20 Businesses
>95% Active share relative to Russell 1000 Index.