"Attractive investment management organizations encourage decisions directed toward creating investment returns, not toward generating fee income for the manager. Such principal-oriented advisors tend to be small, entrepreneurial, and independent."
David F. Swenson, Yale CIO, in Pioneering Portfolio Management.
Mission
To achieve significant alpha and better risk attributes over a 3-5 year horizon, with superior service and transparency through Separately Managed Accounts.
Specialty
A concentrated portfolio of U.S. Large Cap Growth or Large Cap Core equities.
Methodology
The starting point to determine any business's potential cash flow is its employment of capital, which is first reflected on its balance sheet. Academic studies show that key balance sheet changes can predict the growth potential of cash flow and that the market is slow to react, thus creating a mispricing anomaly. To capture this anomaly Beacon Street Capital created a sophisti-cated algorithm to quantify internal growth potential whose change serves as a proxy for a change in the value of a company's stock, thus giving us a competitive edge in the buy/sell decision process to which we apply a fundamental judgment overlay to manage portfolio risk. This hybrid form of portfolio management creates a new pathway to alpha, one which generates a consistent and timeless source of excess returns for us and our clients.
Furthermore, because internal growth potential is less volatile than expectations of future value, these excess returns are achieved with a low standard deviation when compared to a benchmark index. A low standard deviation boosts the power of compounding on rates of return and causes money to grow exponentially. These two factors, excess returns and low volatility, are the keys to building wealth over time.
Experienced. Capable. Consistent.