INVESTMENT PROCESS

Idea Generation

Identify potentially undervalued securities through valuation screens, industry experience, deal diligence, and established network of buy-side and sell side relationships.

Fundamental Research

Conduct qualitative analysis to assess clarity of business model and value proposition, management execution, consistency of earnings, durability of competitive advantage, industry drivers, sources of risk, and any hidden asset value.

Model Cash Flows

Model financial statements and cash flows using key financial performance drivers such as volume, price, and cost structure.

Valuation Approach

Calculate intrinsic value using a propietary three-pronged approach.

1. Relative value using price multiples

2. Liquidation value

3. Present value of cash flows

Portfolio Construction

Select securities and size positions to increase Margin of Safety, diversify sources of risk, and maintain deployable capital. Monitor and sell when criteria no longer met.

This acquisition criterion contains general parameters only and investments purchased by the Fund are not limited to the criteria specified herein. Basler Capital has the authority to purchase investments outside these parameters if Basler Capital believes that the purchase of such investment is within the investment strategy and risk parameters of the client.