Thinking Outside the Box

Younger growth companies have the potential to be transformative, shaping the future by pioneering entirely new industries and markets, or completely revolutionizing existing ones, and creating significant barriers to entry as they stake out new territories.

Organizations like these rarely fit into predetermined categories; they aren’t classifiable since they are essentially creating entirely new classifications. But if you know what to look for, they’re out there.

At Barton, we’ve spent more than a decade together, and many more years individually, focused on identifying and investing in these misunderstood and underestimated trailblazing growth businesses.

Barton Focused Growth

Portfolio Management

Our Process

Barton Focused Growth

We run a concentrated investment strategy. We focus our research on specific types of companies. This actively refined universe of potential investments allows us to dig deeper – looking past the stated financials to develop a fuller and more nuanced understanding of these select companies as we winnow them down towards what ultimately could be included in our watch list. We spend a great deal of time analyzing the products and services they sell, the customers and markets whose needs they meet, and their respective managements visions that will drive their future growth and successes.

As long-term investors, whose average holding period is greater than five years and with a target holding period of more than a decade, our portfolios have historically been managed with the goal of tax efficiency. While we won’t hesitate to sell a position when material changes call for it, those instances have been uncommon. Rarely do we need to do anything more than periodically trim positions, resulting in the added advantage of deferring long-term capital gains for many years.

Our goal is to compound the value of our clients’ investment portfolios over the entirety of the business cycle at a rate greater than the market after all fees. We strive to remain fully invested at all times since we believe that the companies we purchase are undervalued relative to our assessment of their long-term intrinsic value.

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10-15

Stocks

5%+

Position

Portfolio Management

As long-term investors in young growth companies, we aren’t swayed by price volatility or compelled to alter our portfolio to track a particular benchmark. Instead, we manage a very concentrated group of equity holdings (10-15 stocks) by paying close attention to each investment’s economics and potential – only concerning ourselves with ensuring that we haven’t paid more than our assessment of intrinsic corporate value. Each of our investments is selected because we think it is a good investment, not because we think that we need to own something from a certain sector just to give us diversification.

Additionally, in an effort to increase overall portfolio effectiveness, we:

1

buy in size for new ideas (5% +) to own enough to make a difference on the upside;

2

avoid costly tactical trading strategies that miss out on much of an investment’s long-term appreciation;

3

don’t trade in, out, and around positions to attempt to time the market;

4

control the size of successful investments relative to the overall portfolio; and

5

if a portfolio position grows to become outsized relative to the whole portfolio, we start to reduce that holding by a limited amount annually.

Our Investment Process

Get in Touch

One Tower Bridge | 100 Front Street | Suite 980 | West Conshohocken | PA 19428

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