HS Management Partners (HSMP) employs a focused, bottom-up, fundamental approach to one sole investment strategy HSMP Concentrated Quality Growth Equity strategy. The firm seeks to invest in companies that possess: strong management teams, superior business models, enduring competitive advantages, high free cash flow characteristics, global platforms, and/or strong, reasonably attainable, earnings prospects.In implementing their investment strategy, the firm typically builds a concentrated portfolio with a hard cap on company names and with the goal of keeping client's capital nearly fully invested. Client accounts generally hold 20 to 25 companies, although in certain circumstances they may hold more or less names. Cash is not a major component of our strategy and HSCM tends to keep very low cash balances in client accounts. Although they primarily invest in domestic securities in the form of common stock, client portfolios can include foreign issuer equity securities in the form of ADRs (both sponsored and non-sponsored) or ordinary shares. As bottom-up, fundamentals-first investors, HSMP does not maintain limits on industry or sector weightings, and while they do limit portfolio positions by company, clients' portfolios are likely to be significantly concentrated by sector, industry and/or geography, among other factors (for example, clients' portfolios can have over 50% exposure to the consumer discretionary, consumer staples and/or technology sectors). HSCM takes an incremental approach to actively managing client portfolios. Their annual portfolio turnover rate has ranged generally between 65% to 95% (measured in dollars), and is comprised of new names and incremental changes to existing positions.
