Continental Advisors LLC is an SEC-registered investment adviser founded in 1999. The firm is focused primarily on three long-short equity fund strategies (Financial Services, Healthcare and Opportunities). The senior principals of the firm have worked together for over a decade and, on average, bring more than 20 years experience in the securities and money management industry. The firm manages approximately $272 million in assets for multiple investor types, including high net worth families and individuals.
Our investment strategy is focused primarily on publicly traded equity securities. We seek to preserve and grow capital by combining attractive attributes of “traditional” hedged equity portfolios with “modern” risk management tools and practices. The firm operates with a highly disciplined approach, focused on longer term investment time horizons, and relying on fundamental valuation measures driven by projected cash flows. We strongly believe in aligning the economic interests of investor clients and firm principals.
Our process is focused on identifying individual securities that are trading at prices not reflective of our perception of their value. We attempt to develop and exploit a competitive advantage in security selection by concentrating on specific industries and/or specific subsectors within industries. We are not benchmark, style or capitalization constrained. We conduct analysis of a diverse mix of small, mid and large capitalization companies. We engage in extensive primary research. Our research activities are focused on trying to develop and maintain an edge over other market participants evaluating the investment merits of the companies in our sectors. Activities that assist us in developing an advantage include: maintaining earnings and cash flow models, speaking to company management frequently, listening to company conference calls and presentations, talking to competitors, customers and suppliers, reviewing SEC documents, reading sell-side analyst reports and generally trying to obtain any and all publicly available information that improves our understanding of the company. Our investment professionals are frequently on the road visiting companies and attending conferences and trade shows. We maintain personal and professional relationships with industry executives, private equity managers, regulators, lobbyists, buy-side analysts and sell-side analysts. Our long side investment process is strategic, while the short side is tactical.
Risk Management Philosophy
We believe risk management is an activity, a discipline and a culture – not a system. Our risk management process is continuous and self-improving over time through a feedback mechanism. We use several risk management tools (both proprietary and third party) to optimize, monitor, evaluate and adjust the risk of our portfolio. We optimize through fundamental analysis, security selection, position capital at risk, factor and/or subsector risk, diversification, net directional exposure and gross exposure. We monitor real time exposures and portfolio shocks. We evaluate through detailed performance attribution (longs vs. shorts, benchmark relative, % upside vs. downside participation, etc.). We adjust based on these results and on-going response to market news and events.