We develop “built to last” relationships with our clients through our Principles of Interest Alignment, which assure that our management fees are below market averages, that our remuneration comes mostly from performance fees, with high water mark, and that all partners must reinvest at least 70% of what we make with performance fees in the same portfolio as the clients’ (with no redemptions allowed). Moreover, partners are not allowed to have other investments besides fixed income for eventualities.
On the investment side, we are extremely focused on high quality companies, with potential of high returns, and that we know in depth. As we are disciplined about these points, one of our main differentials (from our Brazilian peers) comes about: we invest in U.S. stocks, besides Brazilian ones, as we believe that the likelihood of finding companies that meet our criteria is higher in the U.S. market than in Brazil. Holding true to our circle of competences, we often find opportunities in the U.S. amid companies barely known by Brazilian investors. Moreover, this strategy gives us the chance to exploit occasional dislocations between the two markets. Recognizing that the U.S. market is more dynamic that the Brazilian one, we will usually have a more diversified portfolio in the former. With this differential we add returns to the fund, besides reducing risk. (We don’t run currency risks in these investments.)
Inspired by Warren Buffett’s and Charlie Munger’s principles, Nebraska’s partners are low-profile professionals, highly focused and disciplined to guarantee the best investment decisions.