Our investment analysis process is performed as a team in order to ensure the refinement of our understanding of the investment through debate and questioning of all assumptions. The analysis of invested companies is a never-ending process, which demands constant monitoring of the companies and the business environment and macroeconomic contexts in which they operate. All of the companies in our coverage universe have their valuation models updated at least weekly and with a regular in-depth review of the investment thesis and its associated risks.In pursuit of the best risk-return ratios and greater margins of safety, we may make investments in out-of-consensus stocks and deviate from the main market benchmarks. We are confident in the results of our work and feel comfortable having opinions contrary to the market.

We understand that our core competence is evaluating businesses. Our investments are strictly based on the valuations of companies whose business we understand and where we are able to reasonably and conservatively estimate future cash flows. Externalities such as macro variables, political and regulatory environments, among others, are considered risk factors to the extent that they can affect the business, but, due to their particular uncertainty, they are not sufficient elements for investment decisions.

We utilize a proprietary risk system which transforms quantitative data and qualitative characteristics of the analyzed companies into risk scores. The level of risk determines the minimum margin of safety required to invest in the company. In addition, the risk score, in conjunction with the calculated margin of safety, determines the relative sizing of each stock in the portfolio.We construct a focused portfolio with a sufficient quantity of investments in order to diversify risks, without neglecting the need to have a deep understanding and constant monitoring of the invested companies. We understand that an excessive quantity of investment positions increases the probability of capital loss if the positions do not present an adequate level of margin of safety.

We believe that robust processes, and a disciplined team to implement them, are necessary to mitigate the risks of our own behavioral biases and to prevent human errors, and, thus, are fundamental for consistent excellence. Structured processes eneable the creation of objectives, the measuring of results, and the standardization of excellence. Our processes are constantly improving in order to eliminate inefficiency, prevent errors, reduce risks, and maximize returns.

We actively and dynamically manage the fund portfolio, adjusting position sizing in accordance with their margin of safety and risk levels. The financial markets are volatile and cyclical. We seek to take advantage of these characteristics to generate value for our clients, altering our allocation to each investment as a result of changing prices in order to continually maximize the risk-return profile of the portfolio.