HMI’s Investable Universe
HMI will invest in companies with high-quality business models – ones that can grow and generate real free cash flow during and beyond a 5- to 10-year horizon. We find these enterprises occupying strategic choke points in expanding economic value chains (industry sectors), where competition or substitution will not impair their growth, return on capital or free cash flow.
HMI will be creative and resourceful in finding value anywhere on the balance sheet and across geographies, utilizing the firm’s deep sector knowledge to exploit value differentials when they arise. We actively manage our portfolio – tolerating and exploiting price volatility in investment instruments to find value and selling when the price no longer offers an attractive return.
Engagement with Companies
HMI seeks to leave each portfolio company stronger than before HMI engaged. While not all companies will benefit from a high degree of involvement, HMI will work with management teams where appropriate. HMI’s strengths in capital allocation, strategy and alignment of interests can be brought to bear through direct dialogue and involvement in a portfolio company’s board of directors.
HMI operates one strategy – to focus on doing one thing and doing that one thing well. Everything from HMI’s legal structure to the firm’s weekly activity flow is designed to remain focused on one thing – generating superior returns over a long timeframe for HMI’s investors. To correctly align interests, everybody at HMI is compensated out of the same income pool.
HMI nurtures a culture of intellectual curiosity and truth-seeking, underpinned by the humility to admit what we do not know. The HMI team seeks to always learn more through relentless research, sector specialization, concentration, iteration and institutional accumulation of knowledge. The HMI team trusts in its knowledge to act counter to conventional wisdom when we believe it is in error.