Win big, lose small. It’s a simple mantra but perfect distillation of our focus on asymmetric long-term outcomes.
Lakehouse Capital focuses on competitively advantaged companies that are growing in attractive industries, led by talented and aligned management teams. Such opportunities tend to offer multiple ways for patient, long-term investors to achieve market outperformance. Meanwhile, we seek to limit our downside via a rigorous research process emphasising financial strength and attractive valuations, among other factors.
Few investments offer the compelling long-term outcomes we search for, as a result we hold large allocations to a concentrated portfolio of elite businesses. We view our stakes in businesses as strategic, long-term investments, not trading positions.
We are firm believers in the power of concentration. Both logic and empirical research support the philosophy of concentrating capital in one’s top ideas, and it well suits our long-term, business-focused, low-turnover, tax-considered approach.
We believe our philosophy and process affords Lakehouse Capital sustainable informational, analytical, and behavioral edges.
- Informational: The Lakehouse Small Companies Fund, focuses on smaller companies in Australia and New Zealand. Such companies receive less attention from brokers and the mainstream press, creating an opportunity for enterprising investors to glean deep insights that are not appreciated by the broader market.
- Analytical: We respect our circles of competence. Our team has deep experience in industries with historically high returns on invested capital, but also has the humility to walk away from industries and situations where we feel we do not have an edge. Further, our long time horizon and concentrated approach allows for greater focus and deeper research into individual investment opportunities.
- Behavioural: In a world where most investors are focused on trading faster, we focus on slowing down the investment process to align with our long time horizon and business-focused approach. We consider patience a necessary competency for outperformance.