STRATEGY
- Companies with strong, defensible franchises
- Current market value well below intrinsic value (>30% PV)
- Identifiable reasons for value gap
- Multiple paths for value creation
- Self-inflicted missteps by management and board create the value opportunity, not the market
Small – Mid Cap Focus
- $500M – $8B market cap offers highest returns and persistent opportunity set
- Most activist funds too large to invest there
- Under-covered by Wall Street research
- Engaged Capital’s deep research expertise maximizes opportunities
- Our Wall Street connections help initiate coverage
Information Advantage
- Universe of 1,400+ companies; typically only need to source 2-3 new core positions annually
- Stronger conviction leads to larger investment
- Uncorrelated returns; we manufacture our returns
- Typically the most knowledgeable shareholder and board member
Private Equity Style In Public Companies
- Engaged Capital becomes the catalyst for change
- Invest for influence not control
- Do not have to pay a control premium
- High impact dialogue with management/Board
- Focus on portfolio companies’ long-term interests (hold 2-5 years)