The Barbell Investment Strategy

A guide to Iridian Asset Management’s investment strategy

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A common misconception about the barbell strategy is that like a literal barbell, the portfolios two sides need to balance to avoid disaster. They dont, necessarily. Some bond portfolios optimized under the barbell strategy will have much of their value concentrated in short-term bonds, others in long-term bonds. Granted, much isnt much of a quantifier, but once you get too far past a 2-1 or 1-2 split, your strategy starts to look less like a barbell and more like a bullet.

Its two-step stock selection process is disciplined, bottom-up, and value-based, and uses mostly in-house generated fundamental research to identify companies undergoing corporate change and generating large amounts of free cash flow. The fund researches a company when an investment premise or event indicates that a catalyst exists that could create investment value. Examples of catalysts are: management change, acquisition/consolidation, divestiture/spin-off, unrecognized or non-performing assets, changing industry conditions, strategy to enhance shareholder value, and significant stock repurchase. In the small-cap market, investing in temporary pricing inefficiencies presents unique opportunities. Iridian, which is based inWestport, Connecticut, was founded in 1996 by David Cohen and Harold Levy, two seasoned investment professionals who have worked side-by-side in the investment industry for over 20 years.


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