The Garden Street Capital investment partnership is the engine which drives the growth of the Educational Foundation and allows for the attainment of its long-term objectives. As such, it is the duty and obligation of this fund to be guided by a process which is prudent, transparent and responsible while also executing a strategy that achieves maximum growth over the expected lifetime of the Foundation.
A long-term focus is essential to achieving these goals. We are focused on intellectual, societal and capital growth over many decades to come and not on short-term performance incentives which sabotage growth potential. Due to the unique structure of the firm, we are relatively immune to the disincentives caused by agency costs and possess the resultant ability to leverage short-term market expectations in our favor, when suitable.
Although we are an equity investment firm, we do not 'trade' stocks. We establish long-term growth-oriented ownership positions in sound, safe and profitable domestic (U.S.) companies that display the vibrant potential for upside in the years to come; companies which possess many of the same fundamental characterisitics as does the intellectual capital of our students in whom we invest. We do not invest in opaque derivative strategies or assets that are impossible to value. Ours are investments purely in strength, in transparency and in companies that internally and organically generate merit and value. This Fund and the Foundation it supports are expected to remain in existence for the long-term, as will client assets, because the companies we buy are modeled to do the same.
The successful execution of this process and attainment of desired outcomes demands a methodology which is shielded from three things: 1. a short-term incentive focus, 2. the volatility created by impetuous psychological behaviors that conceive unnecessary trading costs and often miss out on long-term value-creation and 3. the negative externalities yielded by an overexposure to media-generated information. Our investment process is uniquely tailored to achieving these aspirations.
We recognize that the field of investing, much like any professional endeavor, has two sides: the business and the profession. The business aspect of investing is a model which is derived to maximize assets under management and collect the residual fees. The 'profession' model is a process which is designed to first create long-term value for clients and then realize benefits to the firm. A recognition of this two-sided model and communication of such to our clients is an imperative first step in the process. Because this Fund is designed to realize revenues and fees not for personal consumption, but for the attainment of the objectives of the Garden Street Educational Foundation, we are obligated to go beyond the simple and near-sighted pursuits of the 'business' side of the aforementioned model. We believe our process is inherently, and fortunately, necessitated towards a long-term, process-over-outcome strategy. This methodology, then, makes these two vehicles (the Fund and the Foundation) perfect complements.
The principals of this firm find wealth in the intellectual challenge that is rooted in understanding and interpreting the psychological aspects of investing, in the challenge of understanding and properly interpreting the market's valuation of individual business models and the concurrent challenge of developing young minds in a way which yields the stated objectives of the Educational Foundation. Although our proprietary investment methodology is appropriately tailored to the long-term goals of this institution, predicting the future of domestic and global equity markets is impossible and we believe a rightful acknowledgement of this fact is imperative to a prudent and practical investment process. Our intuition and experience tells us that our methodology is not only appropriately tailored to the long-term ambitions of our mission but that it is also crafted to provide the greatest chance of realizing outsized and abnormal gains over an extended time horizon. There are, however, no guarantees. As we will remain prudent, learned and responsible, it is expected that time will decide in our favor.
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