Investment Philosophy
The Seng Company is diligently focused on creating attractive long-term performance while mitigating the commensurate risk profile. Through a combination of in-depth research, analytical work and creative structuring, we seek investments that are at a discount to their intrinsic value by exploiting inefficient areas of the real estate market. Opportunities have ranged from providing bridge financing or equity capital to partners to outright fee simple acquisitions of notes or assets. The firm has invested in existing properties as well as undertaken selective development in appropriate situations.
Fundamental Research
While we spend time understanding the impacts of the global economic environment, our investment discipline is built on market by market and project by project fundamental research. We subscribe to the Graham and Dodd dictum that great assets can provide unattractive returns when acquired at the wrong basis or with an inappropriate structure. Conversely, we often find terrific investments in distressed or troubled assets whose intrinsic value can be realized with a reasoned approach and the appropriate positioning in the project and market, respectively.
Value Creation
We specifically avoid transactions that are largely predicated upon successful market timing or a general rising tide. To paraphrase John Maynard Keynes, the market may well stay irrational longer than we can stay solvent. While we recognize the importance of the economic cycles in real estate, we underwrite our investments to realize value through those factors that are reasonably under our control and to anticipate and to mitigate those that are not. Our investments have a clear thesis and plan for creating and executing value creation and for managing downside risk throughout our cycle of investment and disposition.
Principled Investing
Most importantly, our firm believes in a principled approach to investing, and we are committed to the highest standards of professional ethics and integrity. At The Seng Company, we insist on open and honest communication with our investors and partners. We believe in dealing fairly with all those with whom we work, and we will always seek to protect as best we can the interests of those who may bring us potential investments.
We structure all of our investments with a focus towards an alignment of interest amongst all of the respective stakeholders. This includes treating the capital entrusted with us by our investors and partners as we would handle our own, and it means that we invest our own capital with every transaction. The firm abides by the Code of Ethics and Standards of Professional Conduct of the CFA Institute, the global association of Investment Professionals (www.cfainstitute.org).