Altarock Partners was founded by Mark Massey in 2002 and managed to return 12% per year since its inception until 2015. Mark Massey and his partner Scott Bradford are proponents of value investing, more specifically targeting wide moat companies – those that have and can maintain a sustained competitive advantage. In an interview with BeyondProxy, Massey said that they are looking to acquire great businesses at rational prices betting that their earnings are most probably be much higher in one or two decades.
Mark Massey and Scott Bradford’s fund seeks out investment opportunities through qualitative analysis, focusing, among other things, on buybacks. They believe that companies that buy back high amounts of their own stocks may indicate that the management is well-aligned and is convinced in “the durability of its competitive moat.” In a letter to investors, AltaRock Partners outlined some of its other principles, such as strong profitability, global diversity, strong free cash flow, cheap valuation, and historical context, among others.
AltaRock Partners holds a very concentrated portfolio, which usually contains between five and ten holdings at a time. It prefers to treat its positions as actual ownership stakes in businesses and even refer to them as a “conglomerate” drawing inspiration from Warren Buffett and Ben Graham. Mark Massey said that a lot of its investment philosophy was inspired by Warren Buffett and Charlie Munger’s Berkshire Hathaway.