Solstein Capital seeks to compound capital for its clients over a multi-year investment horizon while actively managing risk.
- HIGH ACTIVE SHARE. Solstein's differentiated, concentrated portfolio reflects a high active share.
- CONCENTRATION. Solstein builds concentrated portfolios comprised of high conviction positions. The team's immersive, proprietary research covers investment opportunities and informs individual positions. Thematic research paired with bottom-up analysis drives a differentiated view.
- HIGH QUALITY, FUNDAMENTAL VALUE. The quality of a business and its management team not only affects the return profile but also the risk profile of an investment. Cash flows of high quality businesses often grow through market dislocations--they can provide a margin of safety and help reduce the portfolio's risk profile. A discounted entry price on these cash flows offers further downside protection.
- MANAGED RISKS. Solstein focuses on how the constituents of the portfolio work together and seeks to manage unwanted risks across the positions, in addition to those at the position level. While the team has a tolerance for ambiguity and acting contrarian, it has an aversion to out-sized and/or uncontrollable risks that can impact the firm, the fund, and its investors.
- LONG TERM. Solstein's multi-year investment horizon provides an advantage over the increasing number of short-term market participants focused on the next month or quarter.
Solstein Capital's investment strategy strives to generate differentiated returns while managing risk. The team's proprietary Quality/Value framework drives portfolio construction, risk management, and the investment pipeline focus. For long positions, Solstein concentrates capital in high quality businesses run by shareholder-oriented management teams, with meaningful reinvestment opportunities and/or capital discipline, at a discount to intrinsic value. For hedges and short positions (if applicable to the product), Solstein targets asymmetric opportunities that may generate alpha and reduce risk for the portfolio.
Solstein manages a long-biased hedge fund as well as long-only strategies.
- CONSISTENT PROCESSES. Solstein Capital strongly believes in a consistent, transparent internal process for evaluating and executing investments, as well as building and managing the portfolio.
- FOCUSED SOURCING. Solstein's proprietary Quality/Value framework focuses the investment pipeline for the team.
- TOP-DOWN AND BOTTOM-UP APPROACH. Global research uncovers investment opportunities and informs individual investments. Thematic research paired with bottom-up analysis together drive a differentiated view.
- IMMERSIVE RESEARCH. The team performs immersive, independent due diligence on the ecosystem of a business, including competitors, customers, vendors and regulators--as well as its management and board. This detailed due diligence continues for the life of the investment, to ensure prudent position management.
- IDENTIFIABLE VALUE DRIVERS. The team identifies value drivers that should close the value gap and monitors these drivers and their impact on value over time.
- STATED BOUNDARIES. Solstein Capital methodically constructs and manages the concentrated portfolio within specified position-level and portfolio-level boundaries.
- RISK MANAGEMENT. The team actively solves for risk across the investment function--including macro, portfolio, position, and process factors.