CEO CHANGE STRATEGY
Buy Companies Led by Value Creators. Short Stocks Led By Value Destroyers.

Alpha Generation. To generate alpha, our proprietary process focuses on unique factors that predict CEO success and failure. We synthesize deep diligence on companies’ senior executives and Boards with bottom-up fundamental analysis on businesses.

CEO Value Creation. CEOs create long-term value through their strategic decisions to navigate ever changing market conditions, by building an enduring organizational culture, and through financial performance. Their experience, leadership style, and character determine what decisions they make and how they make them.

“CEOs account for up to a quarter of a company's success or failure.” *  

CEO Succession. When companies replace their CEOs with outsiders, it is often because their predecessors’ strategies or execution failed. At these inflection points, Boards recognize their companies require a different set of leadership skills and expertise. To investors, it is unclear how new leaders will transform strategy and culture, and markets despise uncertainty.

“Will the new CEO create or destroy shareholder value?”  

Investment Process. To ascertain the answer, we seek to understand CEO expertise and fit. What led to hiring a new CEO, what are the implications of hiring an “outsider,” and are they the right match? Are they the best person for the job or were they merely the best person available at the time? How will they change the strategy or business model, and have they been successful with this playbook in the past? Will their impact move the needle? And, how well is their compensation structure aligned with shareholders? We predict how well the new CEO’s skills and expertise will translate to solving the company’s challenges, and quantify their financial impact.