We invest in high-quality growth companies that possess the ability to build their earnings power at above-average rates for long periods of time. We define earnings power as companies achieving high returns on invested capital while possessing an enduring strategic advantage in their marketplace. We build portfolios by identifying and buying well-managed companies we believe can maintain consistent unit growth and strong free cash flow, allowing them to finance their growth using internally generated sources of capital.
Our investment strategy bridges human insight with data analysis to identify companies that demonstrate the building blocks of our philosophy.
Every company is built on these fundamentals:
At Riverbridge, responsible investing is a longstanding bedrock of how we see the very purpose of companies and capital markets. We are committed to investing in companies that are working to add enduring value to the lives of the people and communities they serve. They are companies with a culture of continuous improvement, reducing costs, and minimizing waste so as to fuel growth. These companies aren’t just creating stock market value; they are creating true, sustainable value.
With personal relationships with hundreds of companies, we continually look for companies that stand out in their market. Whether through trade shows, conversation with industry leaders and competitors, or research into the products we see and use every day, we are always listening and searching for companies that meet our criteria.
When we have identified a company we think has potential, our next step is to examine the fundamentals. We take a careful look at the data—unit growth, market position, financials, and accounting practices. Then we get on a plane and meet the management face-to-face, listen to employees, peers, customers, and competitors, and experience the culture for ourselves. Only after thorough due diligence do we add a new company to the portfolio.
We don’t stop testing for endurance once a company has been added to our portfolio. We thoroughly review every company before we increase its position in the portfolio—and we continue to review its fundamental building blocks to ensure they remain sound over time.