We Study Billionaires - The Investor’s Podcast Network

TIP592: Outperforming the Market since 1998 w/ Andrew Brenton

Dec 8, 2023

01:16:11

Snipd AI

Andrew Brenton, CEO and co-founder of Turtle Creek, discusses their average annual return of 20% versus 7% for the market since 1998. Topics include their approach to value investing, finding great businesses, focusing on mid-caps, risk of overpaying, investment case study, portfolio diversification, setting up a synthetic private equity fund, and their success with Home Capital Group.

AI Summary

Highlights

AI Chapters

Episode notes

Podcast summary created with Snipd AI

Quick takeaways

Turtle Creek Asset Management has consistently outperformed the market with an average annual return of 20%, compared to 7% for the overall market.

Andrew Brenton's experience in private markets prepared him to identify and invest in great businesses in the public markets.

Turtle Creek Asset Management employs a continuous optimization strategy in their portfolio construction, adjusting position sizes based on market prices and company performance to enhance returns and outperform.

Deep dives

The Extraordinary Track Record of Turtle Creek Asset Management

Turtle Creek Asset Management, founded in 1998, has achieved an average annual return of 20% compared to 7% for the overall market. Their remarkable investment track record has resulted in significant growth for investors. They have perfected the art of value investing and have consistently outperformed the market for decades.

Continuous Portfolio Optimization and Holding Great Businesses

01:49

Evolution of a Value Investor's Approach

01:26

Outperforming Market and Own Investments through Portfolio Optimization

01:46

Discussion on Random Walk Theory and Portfolio Diversification

01:35

Introduction

2min

Developing Skill Set for Investing in the Public Markets

19min

Effective Valuation Strategies for Quality Businesses

10min

Forecasting Growth Rates and Determining Intrinsic Value

17min

Difference in approach between Turtle Creek and ATS

8min

Market Inefficiencies and Potential Opportunities

28min

A Closing Conversation about the Guest and their Funds

3min

On today’s episode, Clay is joined by Andrew Brenton. Andrew Brenton is the CEO and a co-founder of Turtle Creek.

Since it’s inception in 1998, Turtle Creek has acheived an average annual return of 20% versus just 7% for the market. $10,000 invested into their fund at inception would have grown to over $885,000 as of September 30, 2023, and had that money been invested in the market, it would have been worth just under $52,000.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro

02:21 - How Andrew’s experience in private markets prepared him to take on public markets.

07:23 - Turtle Creek’s distinguished approach to value investing.

14:25 - What makes for a great, unique business for Andrew to get interested in.

18:06 - Why Turtle Creek chose to focus on mid-caps.

21:07 - How Turtle Creek avoids losing money on almost every investment they make.

23:37 - Why overpaying is the biggest risk for Andrew.

27:31 - How Turtle Creek improves upon an approach of simply buying and holding great businesses.

35:38 - An overview of Premium Brands Holdings.

36:56 - An investment case study of Automation Tooling Systems.

44:25 - How Andrew determined that 25-30 companies in the portfolio is the right amount.

56:53 - What led Turtle Creek to set up a synthetic private equity fund.

01:02:02 - The story of Turtle Creek being the largest shareholder of Home Capital Group prior to Berkshire Hathaway taking a major stake.

01:07:20 - How continuous improvement has played a role in Turtle Creek’s success.

01:13:01 - What’s next for Turtle Creek in the next 25 years.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members.
Check out Turtle Creek Asset Management.
Learn more about the Berkshire Summit by clicking here or emailing Clay at clay@theinvestorspodcast.com.
Related Episode:TIP585: Concentrated Value Investing w/ Shree Viswanathan or watch the video.
Check out all the books mentioned and discussed in our podcast episodes here.

NEW TO THE SHOW?

Check out our We Study Billionaires Starter Packs.
Browse through all our episodes (complete with transcripts) here.
Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool.
Enjoy exclusive perks from our favorite Apps and Services.
Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
Learn how to better start, manage, and grow your business with the best business podcasts.

Get the Snipd
podcast app

Unlock the knowledge in podcasts with the podcast player of the future.

AI-powered
podcast player

Listen to all your favourite podcasts with AI-powered features

Discover
highlights

Listen to the best highlights from the podcasts you love and dive into the full episode

Save any
moment

Hear something you like? Tap your headphones to save it with AI-generated key takeaways

Share
& Export