Durable Value Investing
Tourbillon Partners applies a long-only public equity investment strategy using a fundamental, value-oriented approach to find durable businesses globally, with very significant concentration in our 10 largest holdings. Our objective is to deliver superior real returns over the long term without taking undue risk.
Philosophy
Three simple ideas, taken seriously
Our mandate is broad, but the qualities we look for in an investment are rare. We focus on three mental models which we believe are durable: scarcity ('fulcrum assets'), scale ('symbiotic loops'), and stewardship ('outlier management').
Literally, the term means 'the point about which a lever turns’. These are businesses which we believe provide a critical product or service within the value chain in which they operate. This leads to scarcity value and customer loyalty, supporting durable cash flows.
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Fulcrum
Assets
For a business to generate durable cash flows, it must create value for all its stakeholders: customers, suppliers, employees, and regulators included. Companies with these qualities often form a virtuous cycle where growth leads to improving outcomes, a symbiotic loop.
Symbiotic
Loops
Stewardship is vital for sustainable value creation. If a company earns, say, a 20% return on capital, management will have been responsible for redeploying all the capital initially in the business within four years. Outlier managers think long-term, and act like owners.
Outlier Management
Principles
Our core value is shared ownership
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Clients
We see our clients as partners who share our philosophy. We are invested alongside clients, on the same terms.
Owners' yield
We value companies like owners, based on long-term distributable cash flows.
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Shared ownership
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Investments
We are long-term owners of the businesses in which we invest and look to partner with management who share our philosophy.
Portfolio
Ben and Ramesh are equal owners of the portfolio and of the business. We think this leads to higher quality decisions.
Giving
We pledge to share a portion of our profits with charitable causes, and look to foster long-term partnerships.
What makes us different
We define quality by durability, which we identify using an unconventional first-principles approach rather than relying on backward looking quantitative metrics.
Approach to quality
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We are value investors in a durable universe. We see value as free options on durability, based on a conservative assessment of owner earnings yield. We do not rely on multiple expansion.
Focus on value
We focus our attention and research on six areas of the market which best represent the ideas that guide us, and where we have significant domain knowledge.
Domain knowledge
We are not constrained by country, sector or size. This allows us to invest in only the most compelling investment opportunities globally.
Unconstrained
Our business ownership mentality and aligned client base allow for an ‘indefinite’ time horizon.
Time horizon
We will limit our size to focus on client experience. Our simple fee structure aligns our interests with long-term results. We are significantly invested alongside clients, on the same terms.
Aligned
We have a giving pledge and commit to donating a portion of our profits to charitable causes.
Giving
Durable businesses, by definition, need to be sustainable. We have a history of constructively engaging with the companies we have invested in.
Sustainability
Decades of experience including managing several billion USD on behalf of predominantly institutional clients.
Experience
Foundational Documents
Although our form is corporate, we view our clients as partners in the business. This requires shared values as well as honest communication. These foundational documents outline our philosophy, our goals, and our limitations. Though certain elements of our business will evolve, these bedrock principles will not.
Our partners' trust is our most important asset. This document lays out the values we have as a business.
The relationship we wish to build with our clients is one of partnership. This document outlines our investment philosophy, our objectives and our limitations.
We look to invest in durable businesses, which by definition need to be sustainable. This document outlines our approach to sustainability.
People
Ben Beneche, CFA
Prior to Tourbillon, Ben was senior portfolio manager and co-lead of international equities at Pictet Asset Management. For 10 years, he managed all-cap international equity portfolios where he was primarily responsible for investments in Japanese and Asia-Pacific listed businesses. He began his career in 2008 as an analyst focused on US equities and the energy sector.
Co-founder & Portfolio Manager
Ramesh Narayanaswamy
Prior to Tourbillon, Ramesh was a partner and portfolio manager at Veritas Asset Management. Over 11 years, he held roles spanning global fundamental equity research as well as portfolio management. Prior to that, he spent 5 years at Fidelity Management & Research where he was a global industrials and utilities analyst as well as sector portfolio manager.
Co-founder & Portfolio Manager
Contact
Office
Tourbillon Partners c/o Pacific Capital Partners
74 Wigmore Street
London W1U 2SQ
UK