Philosophy
Asymmetric Insight
At AJB Capital, we have the knowledge and experience to identify superior businesses.
- Asymmetric insight can be gained from deeply understanding the factors of competitive advantage that drive return on invested capital (ROIC).
- Long-term ROIC is the key indicator of a firm’s economic strength and value creation.
- We seek to exploit temporary gaps between investor expectations and long-term business fundamentals.
Intrinsic Value. Not Speculation.
We calculate the economic value of a business and compare it to the market price. We buy into businesses that:
- Operate in stable industries with compelling economics.
- Possess durable competitive advantages.
- Are built for the entire economic cycle.
- Are led by capable and trustworthy people who are oriented toward maximizing shareholder value.
Our Approach to Risk
- We view risk as the potential permanent loss of capital rather than volatility in returns.
- We buy into businesses at a substantial discount to intrinsic value, which provides a margin of safety.
- We diversify to balance the potential for loss against dilution of returns.
- We do not use leverage or derivatives to boost returns.
- We ensure the alignment of interests and incentives with our investees and investors.
A True Partnership
We have structured our funds in the spirit of true partnership, sharing in the risks and rewards.
- We minimize expenses and keep fees low. Instead, we focus on sharing in the value we create.
- Profit share is measured after the high-water mark and hard hurdles have been surpassed.
- AJB Capital is fully invested in our funds, taking the same risks and enjoying the same rewards as our investors.
