Investment Strategy

Passport Capital seeks to achieve high compounding risk-adjusted returns in each of its investment strategies. While Passport employs various hedging strategies, we believe our best risk management tool is rigorous research, including consultation with industry, legal and regulatory advisors. Passport also seeks to build strong relationships with the managements of the companies in which it invests.

Global Strategy

The global strategy is a long-biased, value-oriented strategy seeking significant inefficiencies in the world’s most promising capital markets.  The global portfolio is diversified, drawing on the research of Passport’s sector teams and international reach.  Because the strategy seeks very high long-term, risk-adjusted returns, the portfolio includes investments in a wide array of geographies, industries and capitalizations.  The portfolio’s short positions typically derive from our identification of structurally over-invested industries and from risk management considerations.

Real Return Strategy

The real return strategy will invest in a broad range of liquid assets likely to protect wealth in a rising inflation environment.  Investments will include, but not be limited to, public equity investments in basic materials, energy, agriculture, and other inflation protection trades.  The strategy is designed to add diversification by delivering a performance pattern unlike stocks or bonds alone.  Investments will be comprised primarily of public equities but may also include forwards, futures, options, and physical assets. 

India Strategy

Through its own FII, the India strategy invests in Indian companies with a focus on domestic economy sectors such as financial services, media, retail, consumer and special situations.  The strategy has a net long bias, targets long-term franchises, and can be concentrated in a few securities.

Materials Strategy

The materials strategy invests in public and private companies with a focus on the basic materials sector. The public equity investments typically emphasize small cap metals and mining companies.  The private equity investments generally include companies that are in the later stages of development.

Agriculture Strategy

The agriculture strategy targets sectors within the global food and agriculture industry ranging from “dirt to dinner table”, including agricultural inputs, proteins, producers, manufacturers, distributors and retailers.  World population growth, coupled with rising wealth in emerging markets and a tight supply of food, has created compelling opportunities for agriculture related investing.  We look to identify companies with pricing power and those benefitting from supply chain bottlenecks at compelling valuations.  The strategy also seeks to identify industries that are approaching their cyclical inflection points, such as proteins and carbohydrates (worldwide sugar supply is tight, demand increasing due to beverage companies replacing corn syrup with cane sugar and rising demand for sugar-based fuels).  Our global perspective and integrated approach gives us a unique advantage investing in the worldwide agriculture industry.

Energy Strategy

The energy strategy is a long-biased strategy investing in targeted sectors within the global energy industry, including oil service, exploration and production and alternative energy.  In our opinion, valuations do not reflect the scarcity of both energy resources and services required to access them.  Certain sectors/stocks provide superior risk/return characteristics, based on contracts, sales growth, unrecognized potential reserves and information arbitrage.  

Special Opportunities Strategy

The special opportunities strategy seeks to earn superior long-term returns through a concentrated portfolio of public and private investments.  The strategy leverages Passport’s global research, relationships, deal flow, and oversight capacity.  A longer targeted investment duration enables a high degree of concentration and allows for substantial investments in less liquid public and private equities.

Renewable Energy Strategy

The renewable energy strategy is a long biased strategy investing in targeted sectors within the global renewable energy industry, including companies that develop, manufacture, own and promote renewable energy or energy efficiency technologies. In the manager’s opinion, renewable energy will increasingly be part of the solution to meet increased global energy demand driven by the increasing scarcity of traditional hydrocarbon sources, increasing cost competitiveness of renewable energy, and the rising public awareness of the environmental impacts from traditional energy sources.

Rig Strategy

The offshore rig strategy is an equity strategy aimed at achieving superior long-term capital appreciation by investing in a concentrated portfolio of offshore drilling rig contractors, the best risk/reward investment Passport Capital currently sees in the energy sector. Intensive fundamental research is used to monitor the industry and to determine the investment merits of specific companies.