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For institutional investors, our strategies target companies at attractive valuations, implementing identifiable financial and operating improvements to increase valuation, and achieve a liquidity event. The same rigorous analysis and skill that make us good at finding and acquiring promising target companies enables us to identify the path to increase valuations post acquisition.
Philosophy
Our investors trust our long-standing sourcing relationships and agile strategies, built upon rigorous fundamental credit research with an emphasis on capital preservation. We believe in an opportunistic and flexible strategy, allowing us to take advantage of sector driven dislocations or idiosyncratic situations. For example, when the wireless/telcom sector became dislocated in 2002, we proactively looked for opportunities in this sector, making four successful control investments. Similarly, we took advantage of dislocations in the auto sector in 2006-2007, the building products sector in 2008-2011 and the consumer products sector in 2009-2012
Process
In pursuing a target opportunity, the Newport team conducts extensive due diligence and analysis. We generate an internal model articulating the investment thesis, which is thoroughly vetted by our experienced Investment Committee before any trades are pursued. The investment thesis and model are continuously reviewed as a position is built in a target and new information becomes available. After the Investment Committee authorizes a target investment, the Newport team begins by trading into a “starter” position. Price discovery is often important given the lower volume trading typical of the smaller issue size, distressed, and cash bond markets.
Operations
Newport Global’s investment team has been stable and experiencing modest growth. We are an SEC Registered investment company, and we always strive to implement industry best practices, consistently monitor regulatory changes, and investment market changes, as well as investor input for innovative improvements. During FY2017, we upgraded our network with new servers, software, and PCs, including virtual and fallover server technology, local and offsite backup technology, a third party monitored firewall and intrusion detection system, and an anti-malware system. Also during FY2017, we subscribed to Salesforce, a Customer Relationship Management (CRM)