Investment Approach
Our Philosophy

We invest in Quality. While others may claim to do the same, we believe our definition of “quality” is different. It is disciplined. It is uncompromising. It defines who we are.

Quality = Differentiated businesses with exceptional economics

We seek to own differentiated businesses with enduring competitive protections, favorable long-term prospects, and exceptional economic characteristics. We invest in companies which we believe have low business risk as identified by certain financial characteristics—consistent and profitable growth, high returns on capital, strong free cash flow, and a low organic need for external financing. And we look to buy these companies at attractive valuations.

Tenets of Quality

HighQuality Market Control Market ControlAbility to develop,nurture, protect itsmarket. Demonstrateseffective competitivedifferentiation. ManagementExcellence ManagementExcellenceAbility to developand adhereto core competencies.Disciplined capitalallocation. Balance SheetStatement Balance SheetStatementLow capital intensityand low debt IncomeStatement IncomeStatementDurable earningsgrowth; High returnon capital. QualitativeCharacteristics QuantitativeOutputs Cash FlowStatement Cash FlowStatementHigh free cash flow;Self Financing.
Think: Thinking Beyond the Benchmark
Finding the high-quality sweet spot with the Kayne Anderson Rudnick Small Cap Core strategy
Watch: Overview of KAR Investment Management

How we invest in Quality.