A Value-Oriented Investment Partnership
The THD Fund is a value-oriented limited partnership investing in a concentrated selection of publicly traded securities, primarily US, UK and Commonwealth equities.
The Fund was established by Conan Skyrme and Diego Gat in response to the needs of managing their personal and family capital and is advised by THD Investments, LLC, their investment management company.
THD stands for Total Harmonic Distortion, an audio engineering term that describes a certain type of uninvited noise. The name is a perpetual reminder to keep our investment environment clear, focused, and free from the market noise and emotional narratives that can distort valuations.
At THD, we seek to maintain clarity in our research and decision-making by focusing on the key variables that drive long-term investment outcomes:
Launch Year: 2024
Strategy:
‘Fleet System’ portfolio comprised of three categories:
Quality Compounders, Statistical Value, Special Situations
Universe:
• Global selection of publicly traded securities
• Primarily U.S., U.K./Commonwealth, European & Japanese equities
Investment Style:
• Value-oriented
• Emphasis on capital preservation & price discipline
• Thorough bottom-up fundamental research
Our strategy is structured around a three-category portfolio we call our “Fleet System”; an analog to the minimum number of ships comprising a naval fleet, each serving a discrete but complementary function.
Quality businesses with high returns on capital run by capable, transparent and shareholder-friendly management. A long runway of growth shored up by competitive advantage - or an efficient capital return strategy if value-accretive growth is not an option.
Fair businesses trading very cheaply in relation to their asset values or earnings with manageable debt levels and preferably a potential catalyst on the horizon.
Investments involving analysis of various corporate actions; preferably complex ones or situations that may reflexively generate forced selling.
We view stocks as ownership interests in real businesses and determine value through discounted future cash flows, namely fair market asset values and earnings power.
We only buy when securities trade at a meaningful discount to our assessment of intrinsic value, creating a buffer against errors, volatility, and adverse business outcomes.
We rely on bottom-up fundamental analysis, primary research, and disciplined reading to identify positively asymmetric opportunities.
Much like the parimutuel system, in which the odds decline as the popularity of a bet increases, the greatest returns in the capital markets tend to come from being different as well as being right.
| THD Investments | Average Institutional Investor | |
|---|---|---|
| Outlook | Long-term horizon 3–5 year view | Short-term pressure Often <1 year holding period |
| AUM | Smaller size Access to overlooked opportunities | Bigger size Harder to access smaller companies |
| Concentration | Focused portfolio ~25 high-conviction stocks | Over-diversified Risks closet indexing |
| Focus | One fund Fewer distractions, deeper research | Complex platform More admin and committees |
| Flexibility | Aligned investors Built for patience | Benchmark pressure Harder to be different |
| Alignment | Founder capital Invested alongside clients | Limited co-investment Less skin in the game |
We evaluate businesses through bottom-up fundamental analysis, focusing on earnings power, asset value, industry context, and whether the company can be valued with confidence.
We place particular emphasis on balance-sheet strength and cash-flow durability over time, preferring moderate debt levels in our statistical value investments.
We mitigate risk by diversifying across countries, sectors, and industries while maintaining a concentrated portfolio of approximately 25 stocks.
We limit our ownership to less than 5% of outstanding shares.
We sell when our investment thesis changes, a position approaches our assessment of intrinsic value, or we identify a more attractive relative-value opportunity, after considering taxes and transaction costs.
We maintain approximately 25 core positions, weighted by conviction and valuation. Positions generally begin at approximately 4% and do not exceed 10% at cost.
We require a meaningful discount to intrinsic value and therefore a significant margin of safety before investing. Price discipline is a core component of our risk management.
Licenses: CFA charter, Series 7 and Series 63
Certification: Columbia University’s Value Investing Course
Awards: Emmy-nominated sound mixer, Cinema Audio Society (CAS) award winner and multiple international nominations
Certification: Yale University Financial Markets, Professor Robert Shiller, Securities Industry Exam (SIE), AI specialist by trade