NAVIGATE

“We must have the courage to bet on our ideas, to take the calculated risk, and to act.”

— Maxwell Maltz

FIRM OBJECTIVE

Solstein Capital seeks to compound capital for its clients over a multi-year investment horizon while actively managing risk.

INVESTMENT PHILOSOPHY

Solstein’s investment philosophy drives key sources of return.

• NON-CONSENSUS. Allocating capital behind non-consensus views increases the odds of investment success and often mitigates downside. Moreover, phase transitions (e.g., deceleration to acceleration) often drive greater asymmetry in potential returns and areas for risk management.

• HIGH CONVICTION. Solstein’s differentiated, high conviction portfolios reflect a high active share. Differentiated returns require conviction; Solstein builds concentrated portfolios comprised of high conviction investment themes and positions. The team's immersive, proprietary research covers investment opportunities and informs individual positions. Thematic research paired with bottom-up analysis drives a differentiated view.

• HIGH QUALITY, FUNDAMENTAL VALUE. The quality of a business and its management team affects not only the return profile but also the risk profile of an investment. Cash flows of high quality businesses often grow through market dislocations--they can provide a margin of safety and help reduce the portfolio's risk profile. A discounted entry price on these cash flows offers further downside protection.

• OPPORTUNISTIC. Changing economic environments benefit flexible mandates. Solstein tactically invests across geographies, sectors, securities and market capitalizations. Its proprietary investment framework is based on decades of public market and private equity experience, and the team executes this framework across economic and market cycles.

• MANAGED RISKS. Solstein focuses on how the constituents of the portfolio work together and seeks to manage unwanted risks across the portfolio, in addition to those at the position level. While the team has a tolerance for ambiguity and acting contrarian, it has an aversion to out-sized and/or uncontrollable risks that can impact the firm, the fund, and its investors.

• LONGER HORIZON. Solstein’s longer investment horizon provides an advantage over the increasing number of short-term market participants, including passive and quantitative strategies, focused on the next few months or near-term events and market movements.

INVESTMENT STRATEGY

Solstein executes its investment philosophy via a three-step investment framework:

• STEP ONE: MAP THE ENVIRONMENT. Solstein incorporates macroeconomic data for a top-down view. The team seeks to align portfolios and their underlying individual investments with this view, proactively transitioning portfolios in advance of major macroeconomic environment changes and before the transition becomes consensus.

• STEP TWO: IDENTIFY OPPORTUNITIES. The team executes a bottom-up, proprietary fundamental framework based on the team’s extensive public and private market investment experience. The framework enables the team to compare businesses and their securities around the world based on Solstein-defined quality and value levels, with the goal of identifying “best of breed” positions for its bench.

• STEP THREE: MANAGE TACTICALLY. Solstein employs a quantitative, tactical framework to assess trading signals and investor positioning, so that the team can maintain asymmetry in potential returns for individual positions and overall for portfolios.

Solstein Capital has become a signatory of the United Nations-supported Principles for Responsible Investment and shares its Investment Policy.