Businesss Principles and Philosophy

Our culture is built on our core values, which are an important component of how we measure ourselves and our work performance.

Business Principles

Since our founding, CITI EQUITY has been guided by a unifying set of business principles.

Our satisfaction comes from being able to deliver investment performance for clients while taking the high road.

Excellence in investing

Our goal is excellence in investing. To us, this means achieving attractive returns without commensurate risk, an imbalance which can only be achieved in markets that are not "efficient." Although we strive for superior returns, our first priority is that our actions produce consistency, protection of capital, and superior performance in bad times.

Proprietary, in-depth research

Adding value in our markets requires a "knowledge advantage" that can come only from proprietary, in-depth research. We have dedicated a staff of highly skilled specialists to each market and created a research methodology that is consistently applied. Our research revolves around enumerating the elements required for success and identifying investment candidates through which we seek to satisfy those requirements.

Commonality of interests

In order to achieve commonality of interests with our clients, we pay strict attention to potential conflicts of interests, avoiding them if possible and dealing fairly with them if not. We put clients' interests ahead of our own and treat all clients equally. It is our fundamental operating principle that if all of our practices were to become known, there must be no one with grounds for complaint.

Personnel practices

Our personnel practices must contribute to the achievement of our clients' objectives. A harmonious workplace and a spirit of cooperation are indispensable; personnel turnover, office politics and unhealthy competition are to be guarded against. The fruits of our labor will always be shared broadly and equitably with our staff. To that end, employee stock ownership and firm-wide profit participation are key.

Communication with clients

Communication with clients must meet their needs and strengthen our relationships with them. We want every client to thoroughly understand our philosophy, approach, actions and results. If what we do ever comes as a surprise to a client, then we have failed in this regard. In reporting our performance, we accurately state our achievements, neither hiding behind excuses for losses nor taking credit for serendipitous gains.

Management fee arrangements

Our management fee arrangements should compensate us fairly for the value we add and advance a constructive business relationship. Fee arrangements should motivate us to act solely in our clients' best interests; they should be fair, competitive and explicit. All accounts of comparable size must pay comparable fees for the same service.

New products

When adding new products to CITI EQUITY's list of investment strategies, we consider it far more important to avoid mistakes than to capture every opportunity. In each case, our decision to create a new product is based on:

  • Identification of an inefficient market with the potential for attractive returns,
  • conviction that the market can be exploited in a limited-risk fashion, and
  • access to an investment team fully capable of producing the results we seek.

Because of the high priority placed on assuring that these requirements are met, we prefer that new CITI EQUITY products represent "step-outs" into highly related fields undertaken with people with whom we have had extensive first-hand experience.


We are committed to acting responsibly with our stakeholders and society at large. CITI EQUITY (a) incorporates Environmental, Social and Governance considerations in its investment and business decision-making; (b) fosters an inclusive work environment that embraces diversity; and (c) supports the communities in which we live and operate.


Our firm’s profitability must stem from doing all of the above. CITI EQUITY is run for the benefit of its clients and their constituencies, as well as for its owners and employees. Profit without performance, bigness for its own sake and prosperity through cost cutting are all explicitly rejected. Our earnings should grow if we achieve excellence in investing... but only then.

Investment Philosophy

Our investment philosophy consists of six enduring tenets that have remained unchanged since our founding over 25 years ago.

All of our investment activities operate according to the unifying philosophy that follows:

The primacy of risk control

Our goal is not superior investment performance but superior performance with less-than-commensurate risk. Above-average gains in good times are not necessarily proof of a manager's skill; it takes superior performance in bad times to prove that those good-time gains were earned through skill, not simply the acceptance of above average risk. Thus, rather than merely searching for prospective profits, we place the highest priority on preventing losses. It is our overriding belief that, especially in the opportunistic markets in which we work, "if we avoid the losers, the winners will take care of themselves."

Emphasis on consistency

Oscillating between top-quartile results in good years and bottom-quartile results in bad years is not acceptable to us. It is our belief that a superior record is best built on a high batting average rather than a mix of brilliant successes and dismal failures.

The importance of market inefficiency

We feel that skill and hard work can lead to a "knowledge advantage," and thus to potentially superior investment results. But we do not believe this can occur in so-called efficient markets, where large numbers of participants share roughly equal access to information and act in an unbiased fashion to incorporate that information into asset prices. We believe there are less efficient markets in which dispassionate application of skill and effort should pay off for our clients, and it is only in such markets that we invest.

The benefits of specialization

Specialization offers the surest path to the results we, and our clients, seek. Thus, we insist that each of our portfolios do just one thing — practice a single investment specialty — and do it absolutely as well as it can be done. We establish the charter for each investment specialty as explicitly as possible and do not deviate. In this way, there are no surprises; our actions and performance always follow directly from the job we're hired to do. The availability of specialized portfolios enables CITI EQUITY clients interested in a single asset class to get exactly what they want; clients interested in more than one class can combine our portfolios for the mix they desire.

Macro-forecasting not critical to investing

We believe consistently excellent performance can only be achieved through superior knowledge of companies and their securities, not through attempts at predicting what is in store for the economy, interest rates or the securities markets. Therefore, our investment process is entirely bottom-up, based on proprietary, company-specific research. We use overall portfolio structuring as a defensive tool to help us avoid dangerous concentration, rather than as an aggressive weapon expected to enable us to hold more of the things that do best.

Disavowal of market timing

Because we do not believe in the predictive ability required to correctly time markets, we keep portfolios fully invested whenever attractively priced assets can be bought. Concern about the market climate may cause us to tilt toward more defensive investments, increase selectivity or act more deliberately, but we never move to raise cash. Clients hire us to invest in specific market niches, and we must never fail to do our job. Holding investments that decline in price is unpleasant, but missing out on returns because we failed to buy what we were hired to buy is inexcusable.