Evaluating Opportunities

The initial step is to identify and evaluate an investment idea using our RHCP value creation themes. The next step is to conduct detailed due diligence which involves detailed financial and operational analysis, as well as other kinds of investigative actions.

To ensure that each diligence process is carried out in a thorough and consistent manner, RHCP uses its proprietary investment evaluation process, referred to as Returns Through Discipline (RTD). In this approach, we divide the investment decision into three initial components and conduct numerous sub component analysis. This approach ensures that each investment opportunity is thoroughly vetted against rigorous criteria. It also ensures that over time a consistent “bar” is used to evaluate all transactions. This allows RHCP to reverse-engineer later investment performance and to continually improve the processes and analysis we use to diligence and evaluate opportunities. Put simply, this process ensures that RHCP’s investment decision process is disciplined and repeatable.

In addition to using a rigorous and consistent set of analysis to evaluate each investment opportunity, RHCP believes in conducting extensive primary research about issues relating to an investment decision. To do this, RHCP calls heavily on a global network of relationships with industry experts, current and former corporate leaders, and investment professionals. We also spend significant time with management teams and key employees of companies to understand the inner workings of their businesses and the underlying trends and subtleties of their industries.