Investment Strategy Overview
Goodwood approaches each investment fund with a company specific, bottom-up analysis that leverages our core strengths and maximizes long-term success.
Bottom-Up, not Top-Down
– our investment teams allocate capital based (both long and short) on bottom-up, company specific analysis to achieve long-term investment success
– generate our own ideas and proprietary research that leverages our internal expertise as well as our extensive network of industry experts
– focus on companies trading well below fair or intrinsic value relying on cash-flow driven metrics such as EV/EBITDA, FCF yield and Sum-of-the-Parts valuations
– focus on investments with catalysts to unlock the embedded value (for long – such as a merger, acquisition, divestiture, reorganization, etc) or expose (for short investments – fraud, improper accounting or hyped situation, etc)
– given the depth of individual company analysis (and concentration), we will have a regular and active dialog with management for our core holdings. Investment teams have in the past sought broader public support for positions when they have been unable to get management to support well researched strategies to unlock/realize long-term shareholder value (i.e., reducing investment horizon thereby increasing returns)
– focus on finding a few good ideas that our teams have extensively researched, stress tested and know better than anyone else in the market. Be realistic in human bandwidth – bottom-up vs top-down strategy has implications on the number of positions in the Fund’s portfolio
Non-Correlation with Index
– The bottom-up approach combined with concentrated positions and event-driven value investing naturally creates return profiles that are not correlated with the major Canadian market indices.
Transparency to Investors
– open dialog and information flow with clients at all times
Invest in all levels of the Capital Structure
Invest in the right place in the capital structure given the various risks/rewards presented by an individual company