"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
As an emerging manager with a single product specialty, we strive to achieve significant alpha with better risk attributes over a 3-5 year horizon, while providing superior service and full transparency through Separately Managed Accounts.
Specialty
A concentrated portfolio of U.S. Large Cap Growth or Large Cap Core equities.
Methodology
The common denominator and starting point to determine any business' 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 to such changes, thus creating a mispricing anomaly. To capture this mispricing of growth potential Beacon Street Capital created an accounting- based linear algorithm to quantify internal growth potential. A change in growth potential 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 stock selection translates into a consistent 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 and the primary objectives of Beacon Street Capital.
Experienced. Capable. Consistent.