Focused Equity Strategy

The Focused Equity team believes that in order to generate long-term investment outperformance, an investor must:

• Pay as little as possible for future value creation
• Invest in businesses capable of generating excess returns on capital
• Invest in businesses with higher barriers to entry

This philosophy was developed based on the following four tenets of investing which have not changed over time and are embedded within the investment process:

• The key to investing is taking advantage of irrational human behavior
   ○  Buy businesses priced for the late-stage of the corporate life cycle
• Equity portfolios are over-diversified
• Pay as little as possible for the future
   ○  Buy businesses which provide future value creation largely for free
• The most important factor is the barrier to entry