Capstone Investment Group is one of the most renowned alternative investment managers in the US, specializing in fundamental value investing across public and private markets. With over $10 billion in assets under management, Capstone has developed a stellar reputation for consistent outperformance and capital preservation over multiple market cycles. This article provides an in-depth look at Capstone’s investment philosophy, strategies, key executives, performance track record, and prospects for future growth.
Capstone’s Core Investment Principles are Deep Value Investing and Capital Preservation
At its core, Capstone relies on deep fundamental research to uncover attractive investment opportunities trading at substantial discounts to intrinsic value. The firm combines rigorous bottom-up analysis with top-down risk management to construct concentrated yet diversified portfolios across public equities, fixed income, real assets and special situations. Capstone aims to generate consistent risk-adjusted returns while minimizing permanent loss of capital. The firm has a proven track record of navigating different market environments and providing downside protection during periods of market stress.
Capstone Deploys Various Investment Strategies Across Public and Private Markets
Capstone offers a range of alternative investment strategies to institutional clients globally. In public markets, the firm invests in value stocks, distressed debt, mortgage-backed securities, event-driven opportunities and derivatives. In private markets, Capstone targets control-oriented equity investments in middle market companies. The firm’s flexible, multi-strategy approach allows it to pivot across asset classes while adhering to its core principles of value and risk management.
The Firm is Led by Seasoned Investment Professionals with Extensive Experience
Capstone has assembled a world-class investment team led by co-founder and CIO Joshua Schwartz. Schwartz previously served as co-head of U.S. investments at GoldenTree Asset Management and managing director at Goldman Sachs. President Tom Burton was the former deputy comptroller for New York State and CEO of the nation’s third largest public pension fund. Capstone’s seasoned professionals have navigated multiple economic cycles and market dislocations.
Capstone has Delivered Consistent Outperformance with Lower Volatility
Since inception in 2005, Capstone has generated high risk-adjusted returns across its investment vehicles. The firm’s flagship Valor Fund has returned 9.7% net annually since 2005 compared to 7.5% for the S&P 500, with significantly lower volatility. Capstone’s private equity strategies have consistently outperformed relevant benchmarks. The firm’s strong track record demonstrates its ability to preserve capital during downturns and outperform in up markets.
Capstone is Well-Positioned for Continued Growth in Assets and Strategies
As of 2022, Capstone managed over $10 billion in total assets with a global investor base of pension funds, endowments, foundations and family offices. The firm plans to strategically expand into new investment verticals and geographies. With its highly experienced investment team, disciplined processes, and stellar track record, Capstone is poised for significant AUM growth in coming years as it extends its leadership in alternative asset management.
In summary, Capstone Investment Group has established itself as a prominent alternative asset manager built on deep value investing principles and rigorous risk management. With $10B+ in AUM and a multi-strategy approach, Capstone has delivered consistent outperformance through various market cycles. The firm is well-positioned for the next phase of growth.