Capital Growth—Traditional and Hedged

Traditional Capital Growth

We believe that equity investing over the long term should be an integral part of an overall strategic asset allocation. For more than one quarter of a century, our clients have enjoyed substantial long-term gains. Our experience is that investing in companies with superior operating and financial fundamentals, while paying special attention to valuation, will lead to meaningful capital appreciation over long periods of time. We believe these domestic and international opportunities can be achieved through our different equity strategies, most of which are managed through our relationships with among "best of breed" highly respected money managers. The managers we choose are those that have outpaced their benchmarks for long periods of time and have established solid organizations and sound investment processes. These strategies include large-capitalization growth, large-capitalization value, and diversified equity strategies.

We generally recommend that clients allocate a portion of their core equity capital to both large capitalization growth, large-capitalization value and other diversified equity investments. Our large-capitalization growth strategies invest in portfolios of some of the finest large-capitalization growth companies domiciled both in the United States and overseas. These companies have typically grown their earnings at an average annual rate of 10% to 20%, and many generate a substantial part of their earnings from international operations.

Our large-capitalization value strategy invests in portfolios of companies that are believed to be priced below fair value. Many such companies have low share prices to normalized earnings, current earnings below historical norms, a management plan to generate an earnings recovery that appears sound, and in some cases high dividends.

We provide our clients with prudent and convenient diversification via access to what we believe to be among a “best of breed” multi-manager, multi-strategy portfolio. This diverse equity strategy invests in both growth and value styles, large to small capitalization companies, and domestic and internationally domiciled companies.

Hedged Capital Growth

In addition, we provide our clients with access to hedged equity strategies including long/short and structured equities. These investments give our clients exposure to equity markets while being somewhat hedged against severe market downturns. These services permit our clients to enjoy less volatility than typical of traditional equity markets while attempting to achieve investment gains better than those obtained in bonds and absolute return strategies.

Summary

In summary, it is our philosophy to generate above-average returns while accepting what we believe to be below average risk, by being diversified, long-term investors in consistently growing and undervalued businesses in the global market place.