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FOUNDATIONS & FAMILY OFFICES | ALLCAP VALUE EQUITY
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Dearborn Partners, L.L.C.
Dearborn Partners' AllCap Value strategy allows us to search for value wherever we may find it in terms of company size. We seek companies whose
shares trade at a significant discount to intrinsic value and which have an identifiable and measurable catalyst to unlock the value that we discern.
We seek businesses that trade at 10-40% discounts to private market value, we hold so long as intrinsic value rises faster than the share price and we
sell when the share price and business value are near convergence, believing that the cushion between the two helps to reduce risk. Buy/sell targets are
set at purchase and re-set as necessary.
The Russell 3000 Index comprises the possible universe of companies. We use quantitative screens and basic measures of value to help identify attractive
candidates. Such include enterprise value to cash flow, price to sales, profitability measures and management's disciplined deployment of capital. Our
analysis is top-down and bottom-up so that we do not myopically ignore either the big picture or company specific issues. We strive for, and have provided,
good risk-adjusted relative and absolute returns.
A balanced version of the AllCap Value strategy incorporates high quality and short/intermediate duration portfolios of either taxable or tax exempt
bonds and can include some preferred stocks, Treasury Inflation Protected Securities and other sensible income generating and portfolio–value-protecting
investments. We do not take much risk here because the returns of income generating portfolios do not ordinarily justify it. However, lack of risk should
not be confused with lack of creativity. We are very opportunistic, preferring to shorten durations when rising rates are likely and the converse when
falling rates are likely, adding as much value as we can. The bonds provide an anchor to windward for the portfolio and also income for client’s needing it.
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