Risk Control: Fluctuating between above-average returns in good times and below-average returns in bad times is not, in our view, a strategy for long-term success. To achieve superior performance, it is critically important to prevent losses and to outperform in bad times. To control risk in our investment portfolio, Fulcra employs fundamental value and diligent research principles to find attractive investment opportunities, preferring debt and senior securities within a company capital structure.
Fundamental Value: Fulcra employs a fundamental value investing approach to identify under-priced corporate securities. By understanding a company’s business drivers and asset values, we can capitalize on the inherent market volatility in that company’s securities. We generally prefer debt and senior securities because of their priority claims, credit protections and attractive valuation multiples. But our capital structure lens also allows us to find attractive opportunities that may arise in the junior and equity securities of companies that we follow.
Research: In our opinion, many fixed income investors place too much reliance on credit rating agencies, which can drive the inefficient pricing of corporate bonds and loans. We are agnostic to credit ratings and rely instead on skill and hard work to create the incremental knowledge advantage required to drive long-term superior performance. At Fulcra, we devote much of our thinking to misunderstood investment situations, to find under-appreciated and high-yielding securities.
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Vancouver, BC V6B 4W4
DUTY TO OUR CLIENTS
Our duty to our clients is to preserve and enhance their capital and our first rule is return OF capital before return ON capital. We are fixated on providing a service to our clients as opposed to selling them a product, and to that end, we are driven to superior, risk adjusted returns rather than quantity of investors.
All of our investment decisions hinge on thorough, fundamental consistent research, not on rating agency opinions and pronouncements.
Our principals are meaningfully invested in our funds and hence we invest our money right alongside yours. Our focus on absolute and not relative returns stems from our independence of thought and action.