Investment Philosophy
Focus on “high-quality” companies
Company’s ”business risk” is primary risk control factor
Risk Management
Risk = The degree of uncertainty regarding the durability of a business’ earning power
KAR’s investment approach identifies the highest quality companies with competitive advantages and with little individual business risk. We believe, and our results have shown, that a high conviction portfolio of these companies which maintain strong market positions and little to no debt will experience less market risk than a traditional portfolio, provided that they are purchased at attractive prices. View the portfolios we’ve built through our careful application of risk management principles.
Risk Management Guidelines
Investment Oversight
Portfolio Level Controls
Fully diversified portfolio by sector and country (if applicable)
Individual security weights initiated at 1% to 5% of portfolio
Position Reviews
”Position Review” report when a portfolio holding declines 20% absent a broad market decline
Re-validate reasons for original purchase or sell position
Trading Guidelines
Guidelines provided by Portfolio Managers when entering and exiting portfolio holdings
Relative benchmarks and transaction costs are monitored in real time to ensure investments are implemented both efficiently and effectively
Independent Oversight
Risk and Compliance Committee
Oversees all business and regulatory risk
Portfolio Oversight Committee
(Reports to Risk and Compliance Committee)
Oversees all investment and strategy risk
Performance, Analytics & Risk Department
Produces all reporting and quantitative measures of risk
Risk Management Systems
FactSet Attribution and Performance Analytics
MSCI Barra Risk Model
ICE Liquidity Risk Management.