FPA Crescent Fund
Investment Objective and Strategy:
The Fund seeks to provide a total return consistent with reasonable investment risk, through a combination of income and capital appreciation. As we strive for an equity-like return with less risk than the stock market over the long term, we focus on absolute value opportunities across the capital structure.
Absolute value investors. We seek genuine bargains rather than relatively attractive securities.
Alignment of interests. We invest our money alongside yours, and we act as stewards of our shared capital.
Broad mandate. We invest across the capital structure, asset classes, market caps, industries, and geographies. We are willing to hold cash.
Long-term focus. We believe the best way to accomplish our goals is to accept short-term underperformance in exchange for long-term success.
Macroeconomic view. We incorporate an understanding (sometimes limited) of the economic environment.
Volatility. If we have performed our research correctly, volatility creates opportunity, not risk.
Downside protection / Risk minimization. We aim to protect capital first and create long-term equity-like returns second. We cannot eliminate risk, but we conduct ourselves by hoping for the best, while preparing for the worst.
For additional information, please reference the Contrarian Policy Statement.