CHAMPOUSE GROUP LLC 

Champouse Group Background

• The Fund is an investment partnership founded in December 2014
• The Fund’s objective is to produce above-average returns through conservative and opportunistic investing in under-followed equities, with flexibility to pursue other parts of the capital structure

• Modeled after partnerships managed by Warren Buffett from 1956 to 1969
• Only invest in situations with asymmetric risk-reward profiles and value realization catalysts
• Evaluate an investment idea as if buying an entire company, focusing foremost on “price” versus “value”
• Focus on companies with predictable revenue sources and properly incentivized management teams
• Exhaustive bottom-up research and original insight into every investment
• Concentrate effort and assets on a limited number of “best ideas” to minimize risk of capital loss

• Patient, opportunistic investment process and a long term time horizon allows the Fund to pursue only high conviction ideas with the potential to produce outsized returns over time
• Large discounts to fair value and presence of catalysts reduce reliance on direction of market and economy

• Long Biased Value oriented investment partnership – Short positions when appropriate
• Long term, fundamental investors in businesses, not stocks
• Tolerate higher monthly/quarterly volatility in exchange for absolute long-term capital appreciation
• Focus on simple, predictable, under-followed, overlooked, misunderstood, unappreciated, ignored companies at very attractive valuations
• Owner-managers who paid for ownership or otherwise founded the business
  High barriers to entry, high unlevered returns on equity, capacity to retain earnings – No or very limited need for debt financing, especially short-term recourse loans
  Hidden assets, free optionality
• Avoid businesses and geographies likely to experience rapid change
  Identify catalysts to accelerate broad recognition of underlying value to guard against illiquidity risk
• Use ownership to influence recapitalization options (use of owner funds) Only commit when the investment opportunity hits us over-the-head
• When price is extremely cheap relative to our estimate of underlying value Exhaustive bottom-up research and original insight into every investment
• Concentrate effort and assets on a limited number of “best ideas” to minimize risk of capital loss

• Selective investments in special situations e.g. securities with a timetable, results tied to corporate activity not general market
• Mergers, reorganizations, spin-offs, tender-offers, post bankruptcy securities, etc
• Arbitrage