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Value investing
A value investor with an appreciation that value is created at the point of buying, and this should be done significantly below intrinsic value.
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Protection of capital
There is more time spent upfront understanding the downside risk to each investment and having a substantial margin of safety between intrinsic value and share price. Returns are secondary to protection of permanent capital.
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Undervalued businesses
VCP invest in strong businesses that are undervalued, rather than targeting turnarounds. The business should function efficiently without VCP intervention.
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Attractive business model
VCP’s definition of an attractive business model includes factors such as strong brands, pricing power in chosen market usually through unique competitive advantages, an ability to improve operating margins strong management teams, healthy balance sheet, and strong cash flows.
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Partnership
Control is not critical for the VCP business model. We prefer partnership at a discount to control at a premium.
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Alignment of stakeholder interests
Alignment of interests with investors, shareholders and management. VCP founders and staff are significant investors in their own business, which provides a stable pool of permanent capital to match the investment horizon of investee companies.
