We are a value equity firm
focused on absolute returns
and managing downside risk

To us, successful value investors are curious, patient, and have fortitude.

Curiosity is necessary to understand the fundamentals of a business, as well as the potential risks and rewards of an investment.

Patience is a rare trait that we believe is required for value investors as the price paid for an investment is a key determinant of total return. Investments made at too rich a price leave little margin for error. As value investors, our approach requires patience as we allocate shareholder capital only when investment opportunities can be made at a discount to our conservative estimate of fair value.

Fortitude. Finally, successful value investors must be willing to go it alone, diverge from the crowd, and stick to their investment process regardless of the market environment.

How These Traits Influence the Portfolio

Curiosity

  • We employ a bottom-up fundamental investment process grounded in independent research that results in a deep understanding of potential investments.
  • We look further out in our research and ask “what will drive this company’s earnings for several years?”.  If we are not confident in the answer, we don’t invest.

Patience

  • We define risk as the permanent loss of capital.  We practice patience by first assessing the risks of an investment before assessing the potential return.
  • We wait to make purchases when a stock trades at a significant discount to our conservative estimate of fair value.
  • We make long-term investments in companies that are executing on solid business models and are excellent allocators of shareholder capital.

Fortitude

  • We diverge from the crowd and run a concentrated portfolio of our best investment ideas.  This approach has resulted in a low correlation to our benchmark and our peers.
  • We focus on long-term absolute returns and largely ignore short-term relative returns.  We strive to limit the effects of market downdrafts.
  • We add to our cash position when valuations are rich and will deploy cash when valuations are low and the market is crowded with sellers.

Management

Castle Investment Management was founded in 2010 and is located in Alexandria, Virginia. The firm was founded by Caeli Andrews and Andrew Welle. Caeli and Andrew are responsible for the selection and ongoing monitoring of the Fund’s sub-advisor, including the adherence to the fund’s stated investment objective, style integrity, return objective and risk parameters. Both Caeli and Andrew handle the day-to-day management of the firm and its mutual fund, the Castle Focus Fund.