Benefits of Partnering with IRG
- One Team
- Strong Investment Philosophy
- Stable, Growing Capital Source
- Mutually Beneficial, Long-Term Partnership
Manager Spotlight: Select Equity Group
Reasons for Partnering with BBH
SEG views having thoughtful, long-term-oriented partners as a key competitive advantage. BBH is a best-in-class example, having anchored flagship strategies for the firm. As a partner, BBH is differentiated by its:
Philosophical alignment: BBH practices what it preaches to external managers, guided by a consistent investment philosophy that does not change as markets fluctuate and macroeconomics fads come and go. BBH is a longtime adherent to the same investing principles practiced at SEG: a focus on high-quality businesses, concentrated portfolios and multiyear time horizons. As a result, BBH affords SEG a unique degree of autonomy and like-minded support – particularly during challenging market environments when more philosophically agnostic capital providers are less resolute. BBH’s understanding of why a strategy is outperforming – and importantly, underperforming – is critical to the team’s willingness to deploy capital into declining markets when SEG views those moments as contrarian buying opportunities.
Capital provision at scale: Rather than hedging its bets across hundreds of partners, BBH brings a uniquely high-conviction approach to manager selection; by investing its stable and growing asset base across its concentrated stable of partners, the firm is therefore able to provide significant capital to individual managers. Leveraging this scale, BBH often serves as either a crucial anchor investor (for newer managers) or fund closer (for more established strategies), in both cases allowing managers to spend less time fundraising and more time conducting research and deploying capital.
Portfolio-level due diligence: BBH is focused on understanding what its partners own and why, often conducting complementary due diligence on individual holdings and engaging in constructive lines of questioning. This stock picker’s skillset and mentality is rare among capital allocators and improves the level of discourse we are able to have regarding our research and portfolio construction. As a result, quarterly and annual meetings feel more like dialogues, not presentations, with BBH acting as a provider of not only capital, but also of additive ideas.
Investment Objective and Philosophy
BBH’s investment objective is to preserve and grow our clients’ capital in the long run. We do this by adhering to a consistent investment philosophy.
|Core Tenets of Investment Philosophy
|Active Management, Concentration; Bottom-Up Fundamental Research
|Unique View of Risk
|Intrinsic Value/Margin of Safety Framework
|Disciplined, Patient, Long-Term Ownership Perspective
|Partner with managers who have concentrated portfolios in which they know what they own and why
|View capital impairment and inflation as biggest threats to financial health, market volatility as opportunity to buy high-quality assets at a discount to valuation
|Seek to invest in securities trading below their intrinsic value* estimate, creating a margin of safety**
|Wait for investments to realize value to achieve exceptional long-term returns; hold cash when there are no attractive opportunities and sell when investments no longer offer acceptable returns relative to loss potential
|*Intrinsic value represents what we believe to be the value of a security based on our analysis of both tangible and intangible factors.
**A margin of safety exists when we believe there is a significant discount to intrinsic value at the time of purchase.
We seek to leverage our significant direct investing experience in evaluating and structuring long-term partnerships with outside managers who fit our criteria.
Interested in partnering with our Investment Research Group? To learn more about the process, email us at BBH.Investment.Research.Group@bbh.com.
This communication is for informational purposes only. The information herein has not been based on a consideration of any individual investor’s circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice. Individuals should consult their personal tax, accounting and legal advisers regarding any potential investment or strategy. Any views and opinions are subject to change at any time.
This material does not constitute an offer or solicitation in any jurisdiction where or to any person to whom it would be unauthorized to do so. PB-04766-2021-08-10.