Is It Important to Meet with Management Teams Before Investing?

Portfolio Managers John Gillespie, Kevin O’Brien and Jason Kish recently sat down and answered 11 questions regarding the team’s unique value-investing philosophy as well as lessons learned from past experiences. One of the questions we asked was, “What are some benefits of meeting with management teams?” This is what they had to say: 

We view interaction with target managements prior to investing as highly valuable, and we have discussions with potential portfolio holdings’ management whenever possible (we speak with company management on a very high percentage of new ideas and portfolio holdings). Those conversations could be over the phone, at the company’s headquarters, or in a “one on one” setting at an investment conference. 

Is It Important to Meet with Management Teams Before Investing?We also routinely follow up with management after we invest – often several times a year. Content of the conversations vary, and could include: management’s view of their operating environment; their outlook for free cash flow generation and capital management; their views on the current M&A environment, including how much they would stretch their balance sheet or capital ratios for a strategic action; how overall incentives and management responsibilities are structured; or other high-level, strategy-oriented topics that could give us a better idea of whether they “think like owners.”

Visiting an investment’s physical location such as headquarters, major manufacturing facilities, or customer-facing locations are all activities we deem as productive and important. Often the content of the discussion is less important than the body language employed. If we have spoken to a management team 25 times over the past decade, what is said can mean less than how it was said. 

Explore the 10 other Q&As in the full document, available below. Topics include:
  • Why portfolio managers should have their personal assets invested alongside shareholders
  • Tips on avoiding Wall Street group think
  • How our approach to equities is similar to high-quality bond managers

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The views described herein do not constitute investment advice, are not a guarantee of future performance, and are not intended as an offer or solicitation with respect to the purchase or sale of any security. Investing involves risk, including loss of principal. Investors should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. Please review the offering memorandum or prospectus of a Fund for a complete discussion of the Fund’s risks which include, but are not limited to: possible loss of principal amount invested; stock market risk; value risk; interest rate risk; income risk; credit risk; foreign securities risk; currency risk and derivatives risk.

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