Over more than three decades, Marathon’s investment philosophy has evolved, but two simple ideas about how capitalism works in the long run have always been paramount. 

The first is the observation that high returns in industries tend to attract capital and competition, just as low returns repel them.  The resulting ebb and flow of capital affects long-term returns for shareholders in often predictable ways, what we call the capital cycle.  Since high levels of investment tend to be detrimental to shareholder returns over the long run, Marathon seeks to invest in companies with high returns sustained by barriers to entry deterring investment or companies with low returns in industries where investment is declining.

The second guiding idea is that management skill in allocating capital is vital over the long-term.  The best managers understand and seek to alter the capital cycle in their industries through sensible reinvestment choices.  Decisions about new capital projects, acquisitions or disposals, and equity issuance or buybacks are critical to the ultimate outcome for shareholders.

For more information on Marathon visit www.marathon.co.uk.