"SEPARATING TRUFFLES FROM TOADSTOOLS."
As we search out potential investments, our discerning senses focus on five key attributes that we believe are hallmarks of success and leadership.
Exceptional Team
As important as strategy is the people factor. No single factor is a greater determinant of success than the quality of the founding or executive management team. Every partner of Grail interviews prospective Portfolio Company executives to assess leadership quality.
Differentiated Strategy
We possess a strong view of the issues driving the global financial services sector. We seek a company whose strategy challenges and entices us. We seek out businesses that are among the first movers willing and able to benefit accordingly.
Aggressively Exploited Competitive Edge
We look for companies that are clear about the competitive edge they possess and aggressive in exploiting it. Cutting edge companies leverage their competitive advantage so that they relegate older model competitors to the back bench and keep new ones from entering their arena.
Defensively Oriented Business Model
Defensive business models tend to produce rapid growth, and so we favor candidates that utilize them. The hallmarks of this type of model include a focus on positive cash flow derived from sustainable value-based pricing; "enterprise value added" approaches to capital allocation; a “measurement equals management” approach to executive compensation and supervision; lean operations; and a strategic use of outsourcing.
Culture Of Merit
We exclusively invest in companies with cultures of merit because we believe this environment breeds the highest rate of success. True cultures of merit embody measurement, communication and unambiguous consequences—positive and negative—for executives and employees.