About the Firm

Clarkston Capital Partners, LLC is a Michigan-based investment management firm that is 100% employee owned. Our Midwestern roots combined with our unconventional backgrounds provide the foundation for the investment philosophy we utilize to serve our clients.

Clarkston’s beginnings trace back to 2004 when brothers Jeff and Jerry Hakala founded Clarkston Capital Management, LLC after each started their career in a field other than investment management. After graduating from college, Jeff initially pursued public accounting while Jerry served in corporate finance. During this time, they developed a passion for investing. Unconstrained by a conventional portfolio management background—and the book of business that often follows when portfolio managers leave to start their own firm—they were able to take a patient approach to developing their own specific approach to investing. Over time, the brothers developed an investment philosophy that we refer to as “Quality Value” that relies on a combination of their Midwestern values and the patience and discipline developed through their unconventional beginnings.

“Quality Value” rests on the belief that the best way to grow wealth is through the long-term ownership of quality businesses. Our Value framework is used in conjunction with Quality to attempt to mitigate the risk of permanent impairment of capital. Clarkston Capital currently uses this investment philosophy to manage three equity strategies that are managed via:

ONE TEAM, ONE PROCESS, AND GUIDED BY OUR ONE INVESTMENT PHILOSOPHY.

Philosophy

Clarkston was founded on the belief that the best way to grow wealth is through the long-term ownership of quality businesses. As such, our approach to investing is to perform due diligence and assess risks as if we are buying the entire business on behalf of our clients. This approach is paramount to our philosophy because it:

• Facilitates the ability to act as long-term shareholders.
• Attracts the "right" clients: we look to partner with long-term clients who are aligned with our philosophy.
• Enables better relationships and quality conversations with company management teams.
• Reinforces our goal of becoming the most knowledgeable shareholder in the businesses we buy on behalf of our clients.
• Empowers us to exercise patience and act rationally when allocating client capital.

As a result of this long-term approach to owning businesses,
Clarkston Capital clients should expect:

• Concentrated portfolios
• Low turnover and tax efficiency
• Returns that may be uncorrelated to traditional equity benchmarks

Our Process

quality before value

We believe the best way to grow wealth is through the long-term ownership of quality businesses.

we look for “quality” in three areas

Financial Quality

Characterized by a rock-solid balance sheet, strong free cash flow generation, and high Cash Returns on Net Operating Assets (CRONOA).

business Quality

Determined by identifying sustainable competitive advantages and ensuring the business is both understandable and not subject to obsolescence.

Management Quality

Understood through the lens of past capital allocation decisions. Has the company allocated capital in a way that maintains the firm’s competitive advantage, and has that capital led to the compounding of free cash flow per share?

Value

Our Value framework is used in conjunction with Quality as a means to attempt to mitigate the risk of permanent impairment of capital.

Regardless of what the crowd thinks, value matters. Even a high-quality business can be a bad investment if you pay too much.

Value is absolute - never relative. The merits of an investment should only be compared to itself, not to the market or comparable investments.

Appraising businesses is an imprecise and subjective exercise; riddled with the complexities of estimating unknowns and future events. We require a "margin of safety" to attempt to protect against the uncertainties involved in business appraisal. We believe a margin of safety exists when there is a significant discount to our estimate of a business's intrinsic value at the time of purchase.

We consider cash to be a valuable residual to protect capital when absolute opportunities are scarce.

Equity Strategies

Clarkston Capital offers clients
three concentrated equity strategies

All strategies are managed by:

• One Team
• One Process, and
• One "Quality Value" investment philosophy