A Distinctly Differentiated Investment Discipline Designed to outperform the market and value on a risk-adjusted basic

Marshfield Associates is a concentrated, long-only value investment adviser established in 1989. Marshfield is owned by its seven principals who have an average tenure of 23 years and they are located in w. Each principal must invest in the same stocks that Marshfield buys for its clients and may own no other publicly traded equities.

I use Marshfield’s “Concentrated Core Strategy” inside a Separately Managed Account (SMA)* when I want to gain additional equity exposure beyond what is available inside Riverfront Investment Management’s models.

The Separately Managed Account is managed and traded by Marshfield and invested according to the opportunities available when the account opens. My client’s find this approach comforting as Marshfield is not mandated to invest my client’s assets when they feel the risk of owning stocks is higher than the rewards. In fact, it can take up to 3+ years to get fully invested, particularly in frothy markets. Absolute performance return is based on when the account opens.

Marshfield’s SMA is highly concentrated, typically holding 16-20 stocks. They are disciplined adherents of their process and are extremely selective regarding the stocks they want to own. They seek resilient companies with long-term competitive advantages, and they require a margin of safety when making a new stock purchase. Moreover, they are willing to hold cash when they cannot find the opportunities they seek. Historically, their SMAs have been characterized by low turnover and less volatility than the market.

Marshfield Associates Team

Christopher Niemczewski

Managing Principal

Elise Hoffmann

Principal

Chad Goldberg, CFA

Principal

Melissa Vinick

Principal

William G. Stott

Principal

Kim Vinick

Principal

Coleman S. Kendall

Chief Economist

Judy Becker

Research Analyst

Andrew Clark

Research Assistant

Richard Seaton

Director of Business Development

The Process
Fundamental, bottom-up Investors

The Concentrated Core portfolio is a highly concentrated, and industry, sector and cap agnostic.

Marshfield is willing to hold cash – sometimes lots of it – when the companies they want to own are not available at attractive prices. They will often buy more of a stock at a cheaper price.

Marshfield avoids generic “consensus” stocks and seek to exploit market misjudgments in pricing by buying companies that meet their qualitative criteria but are cheaper than their valuation indicates because of a temporary aversion to them. As a result, their pace of investing is determined by opportunities, not when a new account opens. I love this about Marshfield’s process.

Marshfield’s sell discipline encompasses three scenarios: they made a misjudgment in their initial investment; the investment no longer conforms to their investment thesis due to events either internal or external to the company; and the stock is trading at or above the top end of their hold range

Key Attributes

We are fundamental, bottom-up investor

  • Resilience that enables them to navigate the bad times and thrive during the good ones.
  • Competitive Advantage that allows them to earn good returns over a cycle.
  • Management and Corporate Culture that is robust, distinct and appropriate to the business lead by a strong and experience management team.

  • Buy price is set at a significant discount off our estimate of intrinsic value.
  • Sell Price range is set at a significant premium to intrinsic value.
  • We do not link buys and sells and we will hold cash as dry powder while awaiting well price opportunities.

  • Limiting the number of stocks we own, ideally 16-20, allows us to invest with conviction in only our best ideas.
  • Risk is mitigated through qualitiy and price rather than quantity.
  • We avoid the index trap.

  • One of collective engagement intended to surface qualms and anomalies relevant to the companies we examine.
  • Led by three of the firm’s principals who work on a consensus basis.

Marshfield Difference

Historical we have added value ny outperforming during down markets. Our only significant down year (of three in our history) exemplifies this: in 2008, Marshfield Equity Composite* lost 15% while the S&P 500 Index lost 37%.

Whereas others bend with the whims of the market, we remain patient and adhere to our discipline whatever the circumstances. In fact, we believe that it is precisely during periods of discomfort that an investment discipline matters the most.

Our principals invest alongside our clients and are required to own only the names in our portfolio, in the
same proportions as our clients portflolios, and no other publicly traded stocks. We buy and sell for ourselves only after doing so for our clients.**

Marshfield is owned by seven principals who own 100% of the firm and have an average tenure of 23 years at the firm.

Succession is in place and is based upon younger members, over time, aquiring increased ownership interests and enhanced responsibilities within the firm.

For more information about Marshfield go to: https://www.marshfieldinc.com/

Marshfield Concentrated Core SMA Equity Brochure: will compliance allow me to have a link to the most recent
Marshfield Equity Brochure?

Marshfield Associates and iHart Retirement Income Strategies are not affiliated with LPL Financial.

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