Founded by professionals from Appaloosa Management and Soros Fund Management, Marlowe makes concentrated investments in equity and credit across industries globally.
The partnership’s mandate is to first preserve and then safely enhance its capital over time. Marlowe typically identifies companies or industries that are less well understood by the market and benefit from secular trends. We use a value investing philosophy and believe a stock is no different from another asset you own and understand.
Marlowe’s concentrated investment approach stems from the observation that exceptional investments with limited downside are rare and when located, they are a large component of our portfolio. Marlowe’s top ten investments typically comprise 60-95% of its assets and the partnership operates with minimal leverage.
Our strength lies in identifying investments in complex situations where information is weak and incremental sellers are more prone to make mistakes.
We approach investing with an owner’s mentality: a stock is no different from another asset you own and understand. We study the assets rigorously in order to invest rationally when prices change.
Use short-term volatility as an opportunity and maintain discipline while the market reflects our thesis.
Compelling investments are rare. When we find them, we invest a significant amount of partnership funds. Concentrating our capital means concentrating our focus and time, which enhances our knowledge and gives us an advantage over competitors who may be spread across a larger number of investments.
We do not attempt to understand the direction of the market; we are more likely to have an advantage when it comes to a single asset we study extensively:
- Top 10 investments typically average 60-95% of AUM
- Little financial leverage or heavy trading; gross exposure typically 70-160% of AUM
Our funding and long-duration capital has allowed us to operate with an experienced team at scale since inception.
From day one, we instituted institutional-quality compliance, back-office technology, and service providers overseen by our COO, Bill Vernon (over 35 years of experience including 10 years as Perry Capital’s CFO).
Marlowe has operated with an experienced team at scale since inception with backgrounds including Appaloosa, Soros, Thomas H Lee Partners, Centerbridge, Perry Capital. From day one, we instituted institutional-quality compliance, back-office technology, and service providers.
From Marlow's inception we designed a structure intended to optimize our strategy and competitive advantage with the following: (1) a long-duration capital base that matches the multi-year holding period of our investments, (2) a broad mandate that allows movement across industries, capital structures, and geographies to find attractive risk-adjusted returns, (3) nimble fund size to invest in sections of the market where larger skilled competitors would be constrained, and (4) a codified and repeatable investment process that maintains our underwriting standards over market cycles.
Long-term investment horizon
- Investing in situations that lack catalysts is less competitive.
- Our partners are committed to investing over a multi-year time horizon, providing the long-duration business structure to match our long-term investing philosophy.
Broad mandate in debt and equity allows us to work globally across industries and capital structures
- Debt expertise allows Marlowe to invest in the most opportune securities when a distress cycle occurs.
- Equity expertise means Marlowe does not chase credit when opportunities are scarce.
- Our generalist mandate provides the flexibility to avoid overvalued markets or industries and fish in the most attractive ponds
Size is optimized for performance
- Small to medium-sized funds have an unusual performance advantage because they can make meaningful investments in areas where information dissemination is weakest and there are fewer skilled competitors.
- We are a performance vehicle. We want to be rewarded in proportion to our profits, rather than according to the amount of money we manage, which is reflected in the following:
A declining management fee means we only do well when our partners do well
Repeatable investment process
- A consistent investment process is the bedrock of successful risk management and of building a strong, long-term track record.
- Our repeatable process ensures our approach is persistent, that knowledge accumulates within the organization, and that our method can be taught to new hires.
- Our process is focused on high return on time with many interim checks in the context of a lean team that facilitates communication and information flow across the organization.