Investment is most intelligent when it is most businesslike. To us, this means never losing sight of the fact that owning a stock is to own a piece of a real, operating business. This principle emphasizes approaching each investment opportunity with the mindset of a private owner, focusing on business fundamentals rather than obsessing about the noise surrounding the daily ups and downs of the market. By owning a collection of great businesses, purchased at fair prices, and held for many years, we tip the scale in our favour and allow the power of compounding to work for us while limiting the risk of permanent loss of capital.
Our success will be driven by investing in only our best ideas. Our concentrated portfolios are built on the premise that fewer, well-researched investments can outperform a more diversified approach. Our preference to act only when a truly compelling investment opportunity presents itself motivates us to swing hard when we see a pitch we like.
When we think of compounding, we are reminded of the adage that it does not matter how slowly you go as long as you do not stop. A vital component to uninterrupted compounding is to invest with a margin of safety. This is achieved when securities are purchased at prices sufficiently below our conservative assessment of intrinsic value. This concept is akin to driving a truck across a bridge that is built to withstand far more weight than the truck actually carries, ensuring safety even in adverse conditions.
Limian Capital has adopted the original Warren Buffett partnership 0/6/25 fee model, where the firm has no management fee and only earns a performance fee of 25% on annual returns above 6%. For example, to be charged a 1% fee, your investment must earn 10% for the year, before fees. Additionally, we adhere to a high-water mark provision which ensures that if performance is negative in any given year, all losses must be fully recovered, along with a 6% return, before our clients pay any fees. By not charging a management fee, we are in the minority of investment firms that are not compensated merely for asset accumulation or in times of underperformance. As partners, we also commit to personally investing alongside you.
If you’re interested in having a conversation, please contact us.
info@limiancapital.com