Our investment philosophy is based on fundamental value investing in public equities in Brazil, with a focus on 3 drivers:
(i) Superior quality business model – Dominant companies, with structural competitive advantages: relevant growth potential with high ROIC (return on invested capital), presence of barriers to entry in the businesses, most efficient producer or service provider with scale and high cash flow generation.
(ii) Management – We attribute great importance to quality management and to the incentive structure managers are exposed to. We believe internal factors respond for a relevant part of corporate success in the long term. Therefore, it is essential that company managers are aligned with all shareholders.
(iii) Attractive valuation – We seek companies that present distortions between market and intrinsic value, providing a safe margin for investment. We believe discipline is important both to maximize gains and to manage risks, reducing investments with permanent capital loss.