Strategy
Investment Philosophy
The following reflects the investment philosophy and beliefs of Blacktree Investments and its senior executives.
Blacktree provides investment management within a limited number of specialized niche markets where we believe the potential for reward outweighs the risk entailed. All of our investment activities operate according to the unifying philosophy that follows:
Extreme Risk Management
At Blacktree our number one principle of investing is what we call "extreme risk management." Mr. Schwarzbaum is often found quoting his father to young analysts, relaying the fundamental premise of every one of his investments: "The first rule of making money is, don't lose money." Our primary goal is not extraordinary investment performance, but rather extraordinary investment performance with less-than-commensurate risk. To that end, our strategy is focused on avoiding losers, and then winners find their way into our hands.
Opportunism
Opportunism gets a bad rap. At Blacktree opportunism is a guiding principle, though perhaps with a different definition. First, Blacktree pursues opportunism in the sense that an investment at a low price with high probability of growth and success is an outstanding opportunity, regardless of prevailing market conditions at the time. That is to say, though risk averse, Blacktree executives will not allow short term market trends to cloud out a strong medium- to long-term investment opportunity.
Second and perhaps more importantly, at Blacktree we believe in the importance of opportunity over all else. If there is a kernel of an opportunity, the financing, structuring, and operationals will all fall into place; if not, no measure of juggling and gerrymandering will lead to success. To that end, our teams are constantly searching for the opportunity at the core of any business or investment and evaluating deals as such.
Inefficient Markets
Efficient markets favor incumbents and large players. They are difficult to penetrate, and even then only reward those with high volume and long horizons. Inefficeint markets reward the nimble and flexible investor, offering the opportunity for significantly more profit over smaller volumes and shorter timelines. There may be fewer competitors in inefficient markets but competition is no less fierce. Blacktree leverages its decades of experience and expertise in both finace and operations to take advantage of the abundant opportunities available in inefficient markets, if only to those who know they are there.