History

Our firm’s history began in May of 1995 when Kevin Tanner resigned from Smith Barney to start the firm that would eventually grow up to be Saratoga Research & Investment Management. Starting from a very small base of initial investors (and with no independent track record), it took until the spring of 2008 for the firm’s assets under management (AUM) to grow to $100 million. Since then, the firm’s assets under management have grown more than twenty fold. The firm now manages more than 3,000 portfolios with over $2 billion for multiple classes of investors across the country. Learn more about the firm’s early history in The SaratogaRIM Story and its unique environment and culture which Kevin describes in Our Secret Sauce.

What we do

The world around us has grown more complicated over time, and we’re not just talking about finance or even capitalism itself. Over the last several decades the world has become a more dangerous place for investors as repeated cycles of boom and bust have proliferated. As value investors within a small sub-sector of the Quality space, SaratogaRIM has thrived over these turbulent years by consistently seeking asymmetrical exposure to risk and reward. While past performance does not guarantee future returns, since our inception, SaratogaRIM has delivered one of the finest risk-adjusted returns (as measured by Sharpe Ratio) in the Morningstar database of Large Cap equity managers.

investment philosophy

History shows that the best long-term investment records belong to those who benefit from asymmetrical exposure to risk and reward. In our case, that asymmetry has largely been achieved on defense. In other words, we’ve participated in losses when the market fell to a much smaller degree than we’ve participated in gains when the market rose (see Market Capture Analysis). We’ve done so by limiting our investable universe in a way that seeks to minimize the risks of permanent loss of capital during extreme deflationary or inflationary economic environments. We require sustainable competitive advantages and insist on adequate margins of safety between the prices we’re willing to pay and our estimates of underlying intrinsic value. For more detailed explanations, please explore the documents and writings within our Deeper Dive.

Process, PROCESS & Process

SaratogaRIM’s differentiation stems from the disciplined execution of a rigorous, well defined investment process that strictly limits our investable universe to high-quality businesses characterized by strong balance sheets and non-capital intensive business models. We also require a track record of persistently above-average profitability, sensible capital allocation and a belief that sustainable competitive advantages exist. We’re willing to invest when we can do so at prices significantly below our estimates of intrinsic value. It’s been our strict adherence to this investment process that has enabled us to avoid most sources of distress encountered by equity investors throughout history.