MAHOGANY’s investment philosophy is founded on a view that companies led by superior corporate leaders generally deliver above average shareholder returns. Our investment approach seeks to identify undervalued assets and brands that are led by managers that have a consistent track record of generating superior returns on invested capital.

The MAHOGANY Growth Fund is designed to be a cost efficient investment product that focuses on generating long term capital appreciation by investing in stocks that are expected to generate cash flow growth over and above the expected long term cost of capital.

In order to achieve our investment objectives, we have constructed an investment framework, identifying investments where:

• Intrinsic value > Market value as determined by MAHOGANY’s internal analysis
• Management has a superior return on invested capital track record
• Entering a period of secular growth
• Has an expected series of catalysts that are expected to unlock value
• Attractive risk adjusted valuations

The MAHOGANY investment framework also identifies corporate turnaround scenarios where:

• Company owns a stable of strong but mismanaged brands and assets
• Proven management team has replaced the previous regime
• Rationalization of the companies cost model
• Management has taken steps to rejuvenate a previously dominant brand

Return on Invested Capital (ROIC) provides a clear and accurate picture of how efficiently a company is deploys investor capital and whether or not its competitive positioning allows it to generate returns greater than its cost of capital.

ROIC matters. Companies and management teams that deliver superior long term returns on invested capital, tend to deliver superior capital returns over time.

By focusing on the ability of the corporate leadership to generate consistent and reliable returns with investor capital, we can more effectively estimate the intrinsic value of the company and determine whether the investment meets the rigorous standards of the MAHOGANY Capital Identification Process.

Investing in companies with improving ROIC provide a number a number of benefits such as but not limited to:

• ROIC is a quantifiable way to gauge management performance
• Measures performance against all forms of capital (debt + equity)
• Strong capital returns fuel sustainable cash flow, dividend and buyback growth
• Cash flow growth protects against the negative impacts of inflation and deflation