Investment Approach

Kaizen uses a private equity-style, fundamentals-oriented, “boots on the ground” due-diligence method. This is followed with our "infinite loop" of due diligence (continuous due diligence before and after we make an investment). Unlike private equity we use little or no leverage and almost all of our initial investments are in under-followed publicly traded companies. We have a long-only bias.

We “buy a piece of the business” and have a long term mindset. This helps us realize maximum returns, take advantage of long-term tax treatment, and helps to “smooth out” volatility.

Idea Sourcing

The sourcing of high quality ideas is, by far, the toughest thing for an investment professional to do well. This also yields the most value.

The fund manager, David Berry, has built up an extensive global network of “idea sourcers” over the last 35 years.

We solicit and gain several interesting ideas every year from Chairmen and/or CEOs of companies that we have previously or are currently invested in.

The Manager has an informal idea-sharing network with a select group of like-minded investors, analysts, and other fund managers spanning multiple sectors.

The Manager’s network universe of generated, pre-vetted, and filtered ideas reviewed is roughly 60-75 companies per year. About 25-30 of these companies make the cut for further due diligence. We only need to discover 2 or 3 outstanding companies per year.

Note: High quality ideas are not sourced from hot tips, investment screens, models, or elegant formulas.

Sometimes companies we’ve sold in the past due to their achieving full value dip back into the “undervalued/oversold” range, making them attractive buys once again.

  4200 Montrose Blvd., Suite 400   Houston, TX   77006   Phone: (713) 529-3660 

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Why Kaizen?

Best Ideas

Kaizen operates a concentrated “best ideas” strategy. We are generally invested in 12-15 companies that we feel are our best ideas. Diversification is necessary, but we feel that by having fewer positions in best ideas companies (that we can focus on and watch) is better than an unfocused, diluted portfolio. Our investors want our best ideas, not “decent idea #38.” We feel this concentrated focus combined with our infinite loop of due diligence increases our “information edge.”

“Soft Activism”

When needed we take a “soft activism” approach with some of our companies such as introducing them to potential capital sources (equity and/or debt), joint venture partners, hires (officers, directors, consultants), etc.

Alignment of Interests

Alignment of interests - David W. Berry, the principal, has over 70% of his net worth invested in Kaizen.