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A commitment to responsible investing permeates our fundamental approach.

At Riverbridge, responsible investing is a mindset that grounds how we invest.

As an expression of our unchanging investment philosophy, Riverbridge seeks companies that have core business practices that prioritize responsible investing considerations.

Our commitment to responsible investing is manifested not only in the nature of our companies but in our everyday practice. To us, short-sighted trading activity is not responsible investing. We are investors who seek to own companies for long periods of time in the pursuit of building sustainable value.

Since 1987, Riverbridge has served clients with a singular, timeless investment approach that focuses on companies with the fundamentals that position them to outlast market cycles. Our commitment is to invest with endurance.

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OUR INVESTMENT PHILOSOPHY

Riverbridge believes earnings power determines the value of a franchise. We seek to invest in high-quality growth companies that possess the ability to build their earnings power at above-average rates for long periods of time. We define earnings power as companies achieving high returns on invested capital while possessing an enduring strategic advantage in their marketplace. We build portfolios by identifying and buying well-managed companies we believe can maintain consistent unit growth and strong free cash flow, allowing them to finance their growth using internally generated sources of capital.

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OUR INVESTMENT Strategy

We identify companies that demonstrate the investment disciplines of our philosophy:

sound culture and management
strong unit growth
strategic market position
conservative accounting
INTERNALLY FINANCED GROWTH

We analyze each company for our five investment disciplines.

SOUND CULTURE & MANAGEMENT

STRONG UNIT GROWTH

STRATEGIC MARKET POSITION

CONSERVATIVE ACCOUNTING

INTERNALLY FINANCED GROWTH

Companies aligned with these disciplines demonstrate characteristics of a compelling business investment.

Seek to attract and retain top talent, enhancing the company’s offerings
Company is able to pivot and continuously add value to their customers
Diverse thought is taken into consideration, allowing the company to progress
Lessened resource dependency allows for lower operating costs
Business has insight into emerging customer needs due to a high level of trust, allowing them to create in-demand solutions that reduce customer pain points

Trusted partner for collaboration and innovation
Business is less easily displaced because offerings create a tangible value proposition, enhancing retention and attracting new customers
Allows company to focus and execute on long-term strategy vs. external factors and near-term challenges
Company is not reliant upon external financing to sustain its growth across the business cycle
Earnings are not overinflated – investors can be confident in the information management is conveying

These disciplines also demonstrate examples of responsible investment characteristics.

Environmental

Social

Governance

Optimizes resource usage
Resolves inefficiencies
Enhances productivity

High employee investment and engagement
Culture of constant improvement and innovation
High degree of customer intimacy
Excellent industry reputation
Values diversity

Long-term focus
Disciplined capital allocation
Transparent management and prudent governance

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Riverbridge Responsible Investing Report 2022

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