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Surprise is the enemy of thought;
plan for volatile scenarios before they occur.

WHITEBOX INVESTMENT PRINCIPLE NO. 8

Three Pillars of Whitebox

At Whitebox we believe our investment success rises organically out of our organizational culture. The organization is the process.

Our culture is founded on three pillars: our investment principles; the close collaboration of our diverse investment team; and “radical conservative” asset allocation. Because we repeatedly revert to the principles and work collaboratively, our investment process is often more iterative, even more organic than linear.

 

Principle-based
investment process

  • Roadmap for generating potential return by reducing risk
  • Summarized in Whitebox Investment Principles, guiding Whitebox team through every trade
  • Stable process—essential, since inception, for decoding often frantic market change

 

Long-tenured,
collaborative team

  • Collaboration across markets/capital structures crucial to:
    • Efficient, security-agnostic trade structure
    • Identifying relative mispricings
    • Non-obvious trades: “niche of one”
  • Big Toolbox: Equity-Quant, Equity-Fundamental, Credit, Capital Structure Arbitrage, Distressed, Structured Products, Convertible Arbitrage, Legal Claims, Macro, Option Arbitrage, Relative Value
  • Big Sandbox: U.S., Europe, Asia

 

“Radical conservative”
asset allocation

  • Radical: Investment concentration is driven by asymmetry of risk and reward not institutional inertia. Deploy capital rapidly to asymmetric opportunities regardless of prior prejudices.
  • Conservative: Conventional is NOT conservative. Conservative means never accepting a risk without an asymmetric potential reward. A manager who identifies lack of opportunity in a standard strategy is as valuable as someone who discovers a new trade.