The Doric Approach

Doric combines a bottom up fundamental research approach with quantitative analysis, screening and risk management disciplines. The target return of 15-20% is based on the expected returns forecast through DCF/Terminal value analysis and the internal rate of return expected as a part owner of a business. Doric believes that risk can be reduced in three ways. First is the level of due diligence undertaken when reviewing an investment. The second level of risk reduction involves a number of risk management disciplines. These include the setting of stop loss levels based on the underlying volatility of a security, the management of net exposure adjusted for the appropriate beta, analyzed by country exposure and sector exposure, and optimization models comparing historic correlations with expected returns. These models analyze the relationship between value at risk and expected returns. The third level of risk reduction involves an assessment of security type. In many cases a convertible security can be used to minimize downside risk or a preference share or fixed income security can be used to establish an extra margin of safely or reduced overall portfolio value at risk.