Magdalen is opportunity-led rather than allocation-led. We take a patient, long-term approach to capital allocation and go where we believe the relationship between price, value and risk is most attractive.
We go where the opportunities are. We invest with an emphasis on the relationship between price, value and risk, and with the patience to allow successful investments the time necessary to compound.
Our principal focus today is publicly listed businesses, but that reflects where we currently see the most attractive opportunities rather than a permanent constraint on where we can invest.
We are prepared to be selective. Opportunities do not arrive evenly, and capital does not need to be deployed simply because it is available. Our objective is not activity; it is long-term compounding.
We look for situations where we believe value can be created, recognised or ultimately realised over time.
We place considerable weight on downside, resilience and avoiding permanent impairment of capital.
We are comfortable waiting when the opportunity set is unattractive and acting when it becomes compelling.
We prefer decisions that can be judged over years rather than weeks, and we allow successful investments time to develop.
We do not diversify for its own sake. Capital is concentrated where we believe the relationship between value, resilience and prospective return is strongest.
The long-term objective is simple: preserve purchasing power and grow capital through disciplined reinvestment.
Unit values are rebased to 100 at inception in May 2013.
Since 2013, Magdalen capital has been deployed across different opportunity sets. While the nature of those investments has evolved, the underlying objective has remained consistent: allocate capital where the opportunity appears most attractive, realise value where appropriate and compound capital over long periods.
Magdalen has invested across different opportunity sets while maintaining the same emphasis on value, patience and disciplined capital allocation.
Capital has moved between direct investments, public markets and periods of waiting as opportunities have changed. Magdalen is opportunity-led, not allocation-led.
Our principal focus is publicly listed businesses, approached with the same long-term objective: realise value and compound capital.
We invest where we believe the prospective return justifies the price paid and the risks accepted.
We are willing to wait for opportunities and willing to give successful investments time to compound.
We prefer situations where the underlying economics can withstand uncertainty and adverse conditions.
Capital is allocated selectively, with a long-term perspective and without a requirement to remain constantly active.
Magdalen is deliberately concentrated. We do not regard owning a large number of investments as a substitute for understanding them, nor do we diversify simply to reduce short-term movements in reported value.
We do not use leverage. Returns are not enhanced through borrowing; we prefer each investment case to stand on its own economics.
We think about risk primarily as the possibility of permanent impairment of capital. Our approach is therefore intended to be conservative in the risks we accept: we place considerable weight on value, resilience, downside and the ability of an investment to withstand adverse outcomes.
Concentration can increase volatility and means that an error in an individual investment can have a greater effect on overall performance. We accept that trade-off where we believe careful selection gives us a better chance of preserving and compounding capital over the long term.