Mckinney is an investment management company located in Connecticut, USA. It was founded in 1990 by John Mckinney and has grown to manage over $30 billion in assets. Mckinney is known for its value investing approach and focuses on long-term capital appreciation. Some key facts about mckinney investments:
– Mckinney utilizes a bottom-up, fundamental research approach to identify undervalued stocks. The firm’s investment philosophy centers around value investing principles established by Benjamin Graham and David Dodd.
– The firm manages investments across global equities, fixed income, real estate and alternative assets. However, its core expertise lies in U.S. equities.
– Mckinney aims to generate long-term returns by investing in quality companies trading at discounts to intrinsic value. The firm is benchmark agnostic and constructs concentrated, high conviction portfolios.
– The firm’s clientele includes pension funds, endowments, foundations, family offices and high net worth individuals. Mckinney cater towards clients with long-term investment horizons.
In summary, mckinney investments is a well-established investment manager with a focus on value investing across traditional and alternative assets. The firm utilizes a disciplined, bottom-up approach and aims to generate long-term, risk-adjusted returns for its clients.
Mckinney’s Investment Philosophy – Value Investing
Mckinney’s investment philosophy is grounded in the principles of value investing first espoused by Benjamin Graham and David Dodd in the 1930s. The essence of this philosophy is to purchase quality assets at significant discounts to their intrinsic values.
Specifically, Mckinney seeks to identify and invest in companies with the following characteristics:
– Strong business fundamentals and proven track records. Mckinney prefers established companies with enduring competitive advantages.
– Share prices trading substantially below intrinsic value. The firm utilizes detailed valuation models to determine a company’s intrinsic worth.
– Catalysts for value realization. This may include new management, industry consolidation, share buybacks etc.
– Margin of safety. Mckinney insists on a discount to intrinsic value to protect capital from downside risk.
Unlike traditional value investors, Mckinney also invests substantially in alternative assets like real estate, private equity and distressed debt. The firm leverages its bottom-up research process across all asset classes.
Additionally, Mckinney displays willingness to hold concentrated positions in its highest conviction ideas. The firm is benchmark agnostic and asset allocations are based purely on bottom-up opportunity set.
In essence, Mckinney seeks to apply prudent value investing principles laid out decades ago to earn superior long-term returns across traditional and alternative asset classes.
Mckinney’s Research Process – Bottom-Up Stock Selection
Mckinney employs a rigorous, bottom-up research process to identify investment opportunities across equity and credit markets globally. Some key aspects include:
– Screening the investment universe for companies that meet basic value criteria
– Fundamental analysis to understand business model, industry dynamics, competitive advantages, growth prospects and business risks
– Detailed valuation analysis using varied techniques like DCF, comparables, asset-based etc.
– Review of accounting policies. Mckinney favors conservative accounting over aggressive policies.
– Assessment of management quality using track record, incentive structures, skin in the game etc.
– Evaluation of corporate governance standards
– Building financial models with varied growth, margin and valuation scenarios
– Determining portfolio weight using conviction level and relative valuation
Mckinney’s research is spearheaded by sector-focused analysts and portfolio managers with deep domain expertise. The firm leverages both external and proprietary research during idea generation.
The output of Mckinney’s research process is high conviction, concentrated portfolios containing their best bottom-up ideas. Positions are sized according to discount to intrinsic value and conviction level. The firm is willing to be patient during periods of underperformance driven by value dislocations.
Mckinney’s Investments – High Conviction Portfolios
Mckinney constructs concentrated portfolios reflecting their highest conviction investment ideas within stocks, bonds and alternatives. Some salient features:
– Focused portfolios with 25-50 positions. Mckinney prefers depth over breadth.
– Benchmark agnostic stance. Asset allocation is based purely on bottom-up opportunity set.
– Substantial investments in alternative assets like distressed debt, real estate and private equity.
– Flexible mandate allows for significant deviations from index weights.
– Unconstrained approach leads to low correlation with benchmarks.
– Returns are driven primarily by individual security selection results.
– Buys quality assets at significant discounts to intrinsic value.
– Willing to be patient through periods of underperformance.
– Typical holding period of 3-5 years, leading to low turnover.
While Mckinney’s approach can lead to short-term underperformance, it is designed to outperform over full market cycles by exploiting periodic disconnects between price and intrinsic value.
Mckinney’s Strong Track Record
Mckinney has compiled an impressive long-term investment track record across its strategies. Some key highlights:
– The firm’s flagship value equity strategy has returned 12.5% annualized since inception in 1990, compared to 10.2% for the S&P 500 index.
– Mckinney’s value approach has provided downside protection during major market dislocations in the past.
– The firm’s alternative strategies have generated high absolute returns over time with low correlation to equity markets.
– Mckinney’s fixed income strategies have consistently beaten bond market benchmarks.
– The firm has successfully preserved client capital during downturns while generating healthy long-term returns.
– AUM and clientele have steadily grown over the decades as Mckinney has delivered on its value philosophy.
– Veteran investment team with low employee turnover. Stability of key personnel.
Overall, Mckinney has an established long-term track record across market cycles. The firm has generated healthy risk-adjusted returns by sticking to its investment philosophy through different market environments. This established track record is a key reason Mckinney remains a trusted partner for long-term institutional clients.
In summary, Mckinney Investments is a fundamentally-driven investment management firm founded on the principles of value investing. The firm utilizes an intensive, bottom-up research process to construct concentrated portfolios of undervalued securities across equity, fixed income and alternative assets. By maintaining a disciplined value philosophy through market cycles, Mckinney has generated impressive long-term returns for its clients across different investment mandates.