The investment philosophy detailed below outlines the beliefs of Willow Stream Capital and its senior executives.
Willow Stream Capital aims to provide portfolio management with a high level of returns while carefully monitoring risk. All of our investment processes work in accordance with the following philosophy:
Importance of risk control
Risk management is an important part of our investment philosophy we aim to manage investments in such a way that always takes into account risk and controls it. Our strategy is to provide above-average returns independent of the current market performance – a skilled manager gets results regardless of how the market is performing in general. The prevention of loss is key to our strategy.
Consistency is key
Consistent performance on our and our client’s investment is what we aim for, above-average returns across a long-term investment and avoiding failures.
There is no substitute for hard work our skilled team builds knowledge in their market section this leads to a “knowledge advantage,” and so to potentially superior investment results. We believe there are less efficient markets in which dispassionate application of skill and effort should work well for our clients, and it is only in such markets that we invest.
The benefits of specialization
Specialization is the surest path to the results we and our clients seek. That’s why we insist that each of our portfolios do only one thing – practice a single investment specialty – and do it as well as we possibly can. We set the charter for each investment specialty as explicitly as possible and do not deviate from it. In this way, there are no surprises; our actions and performance always flow directly from the task with which we have been entrusted. The availability of specialized portfolios allows Oaktree clients interested in a single asset class to get exactly what they want; clients interested in more than one class can combine our portfolios for the mix they want.
Macro-forecasting is not critical to investing
We believe that consistently superior performance can only be achieved through superior knowledge of companies and their securities, not through attempts to predict the direction of the economy, interest rates, or securities markets. Therefore, our investment process is entirely bottom-up, based on proprietary, company-specific research. We use general portfolio allocation as a defensive tool that helps us avoid dangerous concentrations, rather than as an aggressive weapon that we expect will enable us to hold more of the things that are performing best.
Disregard market timing
Since we do not believe in the predictive ability required to time markets correctly, we keep portfolios fully invested whenever attractively valued assets can be purchased. Concerns about the market climate may cause us to lean toward more defensive investments, increase selectivity, or act more thoughtfully, but we never move to raise cash. Clients hire us to invest in specific market niches, and we can never fail to do our job. Holding investments that are falling in price is unpleasant, but missing out on returns because we did not buy what we were hired to buy is inexcusable.