Deconstructing Quality, Part I

By Burgundy Asset Management

If you are at all familiar with Burgundy, likely you have heard time and again that we invest in “quality” companies when the share prices of those companies are trading below their “intrinsic values” (that is, what we believe is a company’s true worth).

But what does that really mean? Isn’t every active investment manager looking to do the same? Yes…and no. While investing only in quality businesses is the aim of every market participant, many active managers do not want their portfolios to look too different than the underlying benchmark, against which their performance is evaluated. Doing so...