Year in Review
We developed our all-weather, high-alpha strategy over the past 33 years to successfully navigate macroeconomic cycles and deliver consistent risk-adjusted returns. 2022, while rife with a confluence of unprecedented challenges – record inflation, rapid interest rate hikes, broad sell-offs across liquid markets, energy shocks, lingering COVID-19 ripples, and a strong USD that perpetuated weakness in non-dollar denominated currencies – did not surprise us, so much as it served to remind us, that indeed, we were built for this.
More compelling than our prose, however, is the performance by which it is supported. Reflecting on the decades since our inception, we note, with pride and humility, the remarkably consistent returns delivered across all periods, including the turbulent times now punctuated in history books (including the early 90’s recession, internet bubble, great financial crisis, and global pandemic).
Investments made just before macroeconomic dislocations observed, on average, the same return profile as those made immediately after. As Albert Einstein noted, “In the middle of a difficulty lies an opportunity,” and we have, time and time again, created such opportunities through our research-driven, operating-centric strategy.
The outcome less obvious to note, but crucial to consider, is that against the backdrop of time and economic cycles, as we have grown, increased our fund platforms, and expanded our fund sizes, we have delivered even stronger results. This outcome is not accidental, but rather a result of the disciplined investment philosophy we successfully honed over decades. Our ability to leverage our unique insights, both around the globe and across our strategies, has proven to be accretive to our entire platform.
In other words, as we have grown bigger, we have gotten better.
To that end, we have once again been recognized as the Consumer Private Equity Firm of the Year by Private Equity International. But it is your support and trust that are the lifeblood of our business, and our thanks and gratitude to you is surpassed only by our dedication to delivering superior results.
With enthusiasm, we charge forward, eager for the opportunities ahead. The next few months will be broadly influenced by the challenges that beset capital markets throughout 2022. Higher costs of capital coupled with macroeconomic uncertainty are the stalwarts of industrial slack. But, as sector experts who rely on research to identify and understand the overarching themes that drive our investment theses, we discover, as asserted by Einstein, that our opportunities are heightened rather than assuaged. Our specialization, which informs our ability to understand the fundamentals of consumer behavior, will continue to bolster our choiceful discernment and enable us to invest with acute confidence.
Scott & Michael
Our Proven "All-Weather" Investment Playbook
We will deliver superior risk-adjusted returns globally, by partnering with exceptional innovators and leaders to build enduring consumer brands and enterprises. We will collectively pursue excellence – guided by respect, collaboration, humility, and candor; fueled by boundless curiosity; and leavened by humor – with a courageous spirit and a creative intellect.