Our Differentiators
Heard Capital’s investment process begins with understanding points of tension and key debates within the TMT, financial and industrial sectors. We focus on fundamentals – what we can quantify and what is within a management team’s control – to make our assessments of companies’ abilities to succeed over the long term. Key to our evaluation is identifying companies that we believe can grow profitably, make sound capital allocation decisions but may be misunderstood by generalist market participants.
We typically hold 15-20 long positions with an average holding period of five years or more.
Debate-Driven Idea Generation
Our idea generation process is driven by key debates occurring within our sectors of focus.
Our team leverages its nearly 20 years of experience to identify companies that it believes may provide long-term solutions to key debates. We do so by mapping the ecosystem of potential investment opportunities, conducting robust diligence with the objective of arriving at an actionable investment. We believe this process allows us to identify the company best suited to “win” over the long term.
Our investment team challenges each other to avoid confirmation bias and arrive at investment ideas we believe are poised to succeed.
Unit-Based Analysis
The Firm analyzes opportunities utilizing a unit-based approach, a process by which each component (or unit) of a business is analyzed and key metrics are identified. This approach allows the Firm to identify and quantify value creation opportunities within a company and how they may or may not persist over the long term. By breaking a company down to its units, the Firm is better able to anticipate and contemplate challenges posed by the market, thereby allowing the Firm to focus on the most important vectors within the debate.
Integrated Risk Management
Our investment process includes a robust analysis of risk factors at the position and portfolio levels, including prior to capital allocation and throughout the investment life.
Risks are assessed at a variety of levels via proprietary and external tools to manage portfolio and position- level risks, including the engagement of two external data scientist teams to assess and quantify specific risks.
Data Centric Analysis
The Firm takes a rigorous and systematic approach to analyzing and understanding its decisions across all aspects of the investment process, including security selection, exposure management, position sizing and position exit. Through the continuous analysis of historical situations, decisions and outcomes, the Firm seeks to identify sustainable drivers of alpha and create frameworks for the future.