Frequently
Asked Questions
We know you have options and are prepared to work hard to earn your business. We understand that this is an important decision and will work with you to ensure that you are comfortable with your choice. Long-term investing is our craft and our family’s funds will be invested alongside our investment partners. We love to see our investment partners’ wealth grow! To borrow a phrase from Nassim Taleb, we have soul in the game AND skin in the game.
Our Founder and portfolio manager Igor Bekker has ~24 years of experience in investment management and research. Igor spent 17 years at the Ontario Teachers’ Pension Plan, one of the leading global institutional investors with assets of ~C$240B. Most recently, Igor was the Managing Director and Global Co-Head of Teachers’ High Conviction Equities group responsible for C$12B in assets. In addition, Igor ran a Compounders strategy at Teachers’ between 2018-2021. Igor has a top-quartile institutional track record of managing active global equites since 2008.
Investing in Quality provides the philosophical edge: Quality companies tend to provide better absolute and risk-adjusted long-term returns than the broader market. We pick Quality companies using a proprietary differentiated cultural assessment framework that surfaces Enduring Compounders. Balance between confidence and humility provides the temperamental edge. Extending our horizon to 5-7+ years while staying patient reduces competition and gives us the duration edge. Finally, drawing knowledge from different, uncorrelated disciplines (e.g. psychology, social anthropology, philosophy and history) provides an analytical edge.
If you are interested in compounding your wealth over time, please get in touch with us @ info@42KMIP.com . We would be happy to learn about your investment objectives, share additional insights about us and answer any questions. When you are ready, our COO will guide you through the onboarding process.
The answer depends on the individual circumstances of the investment partner. Given the concentrated nature of the strategy, we would not recommend investing your entire liquid net worth. We look to manage a long-term portion of your equity investments.
We aim to hold our positions for 5-7 years, the longer the better. Our investing style in not suited for investors with a time horizon of less than 5 years.
We believe we have a unique competitive advantage with the Enduring Compounders style of investing. We wish to focus our efforts on this program to maximize chances of success.
If you have a question about the investments, you can speak directly with our Founder & PM Igor Bekker ( Igor@42KMIP.com ). For onboarding and administrative questions, our COO Nadya Bekker ( Nadya@42KMIP.com ) will be your main point of contact.
While there are many ways to think about the investment risk, we define it as permanent loss of capital. Not underperformance vs. the benchmark in a given month, quarter or year. This is really important, as it guides our investment choices and shapes long-term investment results.
Since our portfolio is concentrated and does not look like the index, transient underperformance is virtually unavoidable if one aspires to significantly outperform over the long term. We would encourage you to understand the sources of underperformance and compare it to the original strategy. Did we do what we said we would and hit a bump or did we go off-piste? We would also point out that the collective patience of the portfolio manager and the investment partners is one of our main competitive advantages.
A difference between a 9% and a 10% annual return is ~$1.1M - more than double the initial capital!
According to the book “THE ANXIOUS INVESTOR” by Scott Nations, the probability of a positive market return goes from just over 50% on any given day to slightly over 80% on a given decade.
No leverage, no shorting, no derivatives, no short-term trading, no explicit macro bets, no index-hugging, no marking emotions to market.
We like the definition from William Green’s excellent book “RICHER, WISER, HAPPIER“ – “freedom to construct a life that aligns authentically with one’s passions and peculiarities”.
One of our favourite investors Nick Sleep describes it as follows: "denial, that is the reinvention of reality in the mind because the truth is too painful to bear; anchoring, that is a static, historic vision of a problem; and drift, that is how small, incremental changes in thinking build into a big mistake."
While most portfolio managers describe their strategy as long term, the portfolio turnover rate provides the data to assess it. For example, a 20% position turnover implies a 5-year expected holding horizon. We aim to manage the portfolio with an annual turnover rate of about 10%, the lower the better.
As an investor, you want to ensure that you fully understand (and can easily explain to a friend) what and how your money will be invested in. We invest in a portfolio of about 20 Quality businesses, picked from a global universe, where the alignment of culture, strategy and long-term orientation is expected to produce uncommonly high returns on capital over the long term.
