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Concentrated Value Portfolio

At Pelican Bay Capital Management we believe there are three keys to generating market beating equity returns in the long-run.

They are: 

  1. operating with a value philosophy; 
  2. a preference for above market dividend yields; and 
  3. maintaining a concentrated portfolio. 

We utilize these core beliefs to manage investments in our Concentrated Value Portfolio. This Portfolio utilizes a value investment philosophy that focused on holding a limited number of long equity positions with higher than average dividend yields.

Generally, our value investment strategy seeks out companies for investment that the Portfolio Manager deems to be high quality companies as defined by possessing business operations with durable competitive advantages that allow for high returns and growing cash flows streams. We want these high-quality companies to also have solid balance sheets, preferably with a net cash position. We also prefer that their management teams make decisions with an emphasis on maximizing shareholder returns.

Once we find these high-quality companies we generally only invest in their stock if they trade at a steep discount to our estimate of their intrinsic value. This is necessary to provide our investors the opportunity to generate an above market return and protect capital. This discipline creates a wide margin of safety in the event an undesirable scenario plays out in the future. Pelican Bay Capital Management believes that identifying a significant difference between the daily market value of a security and the intrinsic value of that security is what defines an investment opportunity.

Pelican Bay Capital Management employs a largely unconstrained approach that seeks to maximize long-term total returns for our clients. For example, the firm is not constrained by 

  • market capitalization, 
  • industry, 
  • sector or 
  • geography in seeking investment opportunities for clients. 

The Concentrated Value Portfolio invests primarily in common stock positions and depositary receipts (e.g., ADRs), but is permitted to invest in 

  • preferred stock, 
  • convertible bonds, 
  • exchange traded funds, 
  • mutual funds, 
  • REITs, 
  • foreign securities, and 
  • cash in order to execute its investment strategy for clients. 

The Concentrated Value Portfolio emphasizes long-term holding periods for its investments and our goal is to have relatively low portfolio turnover.