Of course the end game with investing in private companies is capital growth. The companies we represent offer a very real and possible opportunity to make huge gains.

Private Companies can be managed for the long term. Many public firms are overly focused on quarterly results and meeting the city’s short-term expectations. When economies around the world are under pressure, we feel one should take a longer-term view and avoid investments that are subject to the vagaries of market sentiment whipsaw. If one is able to take a longer-term view, then, you can position yourself for opportunities where there is an “amplifier” effect on the value or price you initially paid. Normally, this sort of investment is with private companies that show an extreme upside opportunity. The secret is to be able to buy at a low enough price to be essentially at a very stable “floor”.

Private companies tend not to move in the direction of markets going down, and increase in value at a greater rate when markets are going up. This is called non-correlation. It is becoming increasingly difficult to find investments that are not correlated to the markets. Alternative investments can provide a source of opportunity that is based on the merits of the asset itself. We spend a lot of time studying this problem, and are always on the lookout for special opportunities that will hopefully reduce this correlation risk.