We see Healthcare as a growth sector with a consistent pool of great ideas.

Healthcare spending in the United States has grown every year, and has outpaced GDP growth nearly every year, for the past 60 years.* Roughly half of Healthcare dollar growth come from innovation across sub-sectors, including from new drugs, devices, and services.**

We believe a long-biased approach is aligned to the growth profile of the Healthcare industry. Our portfolio is concentrated in innovative, organic-growth companies that are leaders or emerging leaders in their space, run by management teams with integrity and a history of good judgement.

Long Portfolio

• We focus only on innovators and leaders or future leaders in their space. We estimate this to be 50 - 75 companies.

• We do extensive research on these companies to understand their long-term opportunity and outlook.

• At any time we seek to own the 15 - 20 companies that we believe offer the best potential for near-term value creation.

• We constantly do work on these companies to refine our views, and on the broader set to upgrade the portfolio.

Short Portfolio

• We look for individual companies that we believe will decline in value for structural reasons.

• We do not short companies to hedge our long positions.

• We are willing to have zero gross short exposure.

*https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html

**Technological Change and the Growth of Health Care Spending. The Congress of the United States, 2008, pp. 12–12, Technological Change and the Growth of Health Care Spending.