Turtle Creek is a concentrated long only North American mid-cap Investment Manager founded by three partners that previously ran the private equity arm of the Bank of Nova Scotia and left because they saw an opportunity to take their private equity approach and improve on it in public markets. Turtle Creek’s public equity strategy began in November 1998. $1 invested at that time has increased to $79.57, a compound annual return of 21%*. Their returns have been earned through what they believe is a rigorous, repeatable investment approach focused on minimizing risk.
Turtle Creek is where the founding partners have all of their investable wealth; and they are the largest investors. They believe this strong alignment mitigates concerns as to conflicts of interest and lack of focus and attention from one’s wealth manager. In essence, they believe it reduces a number of the risks in choosing a manager and allows clients to focus on a more limited set of criteria, such as: is the manager capable, experienced and hard working. Rest assured, they are all of the above.
Our background, skill-set, temperament and approach differentiate us from other investment managers. Our investment process starts by choosing what we believe are the right companies to own – well run businesses with strong management teams that drive shareholder value higher over time. We then spend considerable time and effort formulating and maintaining a view of each company’s Business Value. Our optimal portfolio is diversified over 25-30 companies in largely unrelated industries with the size of each holding determined by many factors, with the dominant factor being our forecast of a holding’s long term expected return. Changes to our portfolio over time are primarily driven by our response to changes in traded prices. For us, risk is not short-term price volatility but rather the chance of permanently losing money.
We did not set out to earn high returns; rather, we are focused on minimizing risk by owning investments that we believe have limited downside, or a strong ‘margin of safety. We believe that it is possible to both protect your capital and earn superior returns – it is not an either/or proposition.