At North & Webster, we adhere to the classic value investing definition of investing: it is the process of committing capital to situations that provide for security of principal and a desirable return on that principal. Our primary goal is to generate significant risk-adjusted returns for our clients over a long-term time horizon through "long-only" investments in public equity securities.

We believe that there are certain niche investment opportunities in the public markets, particularly among small- and micro-cap companies, that meet our criteria for security of principal and high risk-adjusted returns. These mis-priced small- and mid-cap securities exist because they are often too small for professionals investors--who have the technical skill to identify the opportunities--to deploy capital efficiently. North & Webster has both the necessary size and management skill to capitalize on these opportunities.

We identify investment opportunities through bottom-up fundamental analysis and a rigorous due diligence process. The purpose of fundamental analysis is for the intelligent and motivated investor to understand the true, intrinsic, or private market value of a security. This requires an examination of the present and historical record of the company. The analysis of the company is then expanded to include the terms of the company's capitalization structure in order to arrive at a fair value for that security. Experience has shown that there are periods when markets sell individual securities at significant discounts to their intrinsic value, while at other times, they trade in excess of their intrinsic value. The informed investor is able to take advantage of these periods to purchase securities when they are bargains and sell them when they are dear. We require a thorough understanding of the businesses in which we invest and prefer to invest in situations where detailed and extensive research can provide us with an informational advantage.

We place limits on the size of any given position in our fund as a means of insuring that the portfolio remains adequately diversified. We use aggregate limits to ensure that we do not over-diversify. Our philosophy is that it will be far better to concentrate on those securities which offer the best combination of appreciation potential and safety of principal.

Finally, our mindset is to invest all capital as if it is our own. In fact, much of it is: we are currently the largest clients in the company and we are committed to "eating our own cooking" by investing the majority of our personal assets alongside our clients.