Our Investment Philosophy
and Process

Our investment philosophy is predicated on three key pillars that we believe we can take advantage of to generate attractive long-term returns with a margin of safety that protects us from permanent loss of capital.

Fundamental Analysis

Our investment team has a diligent and rigorous process for analyzing each investment in the portfolio with an owners’ mentality approach.  We look for businesses with what we consider strong normalized earnings and free cash flow with durable competitive advantages.  We believe our source of differentiation for our clients is our ability to develop well informed opinions and judgement across different sectors including both equity and credit investments.

Patient Investing

Our collective experience has demonstrated to us that Mr. Market’s forward expectations are the least accurate when the timeframe is beyond 1 year.  We invest with a multi-year mindset which allows us to think as business owners and focus on the important long-term operational and valuation factors.  The private equity framework for our holding period allows us to generate asymmetric returns over time.

Concentration

We are highly selective with our approach and only invest in our highest conviction ideas.  We believe a rigorous and accurate investment underwriting process is the best risk management tool.

Investment Process

GoodHaven has a track record of delivering attractive returns through a repeatable investment process and investing in quality businesses.

Idea
Sourcing

  • Industry contacts and networks
  • Internal proprietary list of attractive businesses
  • Management & director relationships including from existing positions
  • Existing and prior investments
  • Special Situations with catalysts
  • Quantitative screens
  • Industry events and trade publications

Underwriting Process

  • Rigorous primary research process to develop key company and industry insights
  • Analytical approach with a long-term perspective on financial projections, variant perceptions, and pattern recognition
  • Focus on behavior biases through the lens of a long-term investor to exploit mispricing in the market

Portfolio Construction

  • Top 10 positions will generally make up to 70% of the portfolio
  • Industry and sector agnostic but with a bias towards areas with attractive tailwinds
  • Majority of the portfolio invested in undervalued quality businesses with durable competitive advantages and attractive growth profiles
  • Portfolio will opportunistically invest in special situations with catalysts and outsized return potential