Those who seek active management for their investments often choose relationships at the expense of long term superior results. While relationships provide comfort, prudent investors should seek out active managers with characteristics that identify success:
A philosophy that brings a high probability of providing excess returns over the long term. In reality it is the investment philosophy, not the process, people or size, that creates uniqueness among investment firms, and to succeed that philosophy must identify and exploit a market anomaly and stick with it through all market cycles. Beacon Street Capital does this by recognizing balance sheet changes as a predictor of growth potential, and then benefiting from the market's slowness in reacting to those changes.
A consistent buy/sell discipline.
Active management is all about adding value which requires a competitive
edge.
Our competitive edge
is identifying a market anomaly rooted in General Accepted Accounting
Principles. This leads to a buy/sell discipline that creates a new
pathway to alpha that is timeless and reliable in good times and bad.
A "David vs. Goliath" mentality - small is better. With a small firm the investment management team is more accessible - often just a direct phone call away - and more flexible in serving the individual needs of each client.
Employee ownership. Beacon Street Capital is owned by the investment management team and is not affiliated with any brokerage firms or financial institutions. Portfolio managers have worked together over eight years and have over 50 years of combined investment experience.
Interest aligned with the client. Successful managers have "skin" in the game. We invest along with our clients in the products we manage and offer only Separately Managed Accounts (full transparency) on a fee-only basis.
"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