Values-based investing without compromise
At Archalos, we believe that good character, sound culture, and strong values are the foundation of a successful company and therefore are a strategic asset for investing. This means investors can invest in companies that support their values without conceding returns on that investment.
An innovative approach that goes beyond traditional methods
Most investors focus primarily on financial data, but at Archalos we understand picking a successful investment goes deeper. We’ve set out to identify those hard-to-see, intangible qualities of winning companies. We have developed a research-backed, innovative approach that measures those qualities by analyzing vast amounts of data.
Decades of experience identifying what makes a company succeed
With 50 years of combined investment experience, we’ve studied thousands of companies, managed capital across every market cycle, and seen what truly sets enduring businesses apart. Your hard-earned capital will be diligently invested by seasoned portfolio managers.
Pay practices and incentive design
Merit-Based Pay Gaps Drive 1.4% Higher Returns
Key Metric
+1.46% ROA
Impact of "Economic Pay Disparity" on ROA
The Research
Not all pay gaps are created equal. The same Harvard study that punished "unfair" pay gaps found a positive correlation for "justified" ones. The "Economic Pay Ratio"—disparity driven by observable economic factors like skill, complexity, and performance—was positively associated with firm value. A one standard deviation increase in this merit-based disparity led to a **1.46% increase in RNOA**. This supports "Tournament Theory": when employees perceive that higher pay is achievable through performance, it incentivizes effort rather than resentment.
Data Source:
Academic Source:
Key Finding
Economic (merit-based) pay disparity is positively associated with firm performance (+1.46% ROA).
The Archalos Thesis
We do not advocate for flat pay; we advocate for *fair* pay. The data proves that the market pays a premium for meritocracy. If a company has a wide pay gap that is explained by performance, it signals a healthy competitive culture. We screen for the *ratio of explanation*: Does the pay gap exist because of performance, or because of privilege? The former is an asset; the latter is a liability.
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Operational discipline, continuous improvement, and pursuit of excellence
Internal Mobility
High internal mobility correlates with 20-30% better innovation and 15-20% higher revenue growth.
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Corporate culture, alignment, and ethics
Culture Premium
Strong cultures generate 4x revenue growth, 12x stock appreciation, and 700% net income growth.
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Governance quality
Crash Risk
Higher transparency in human capital metrics correlates with reduced stock price crash risk.
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Talent quality, turnover, and employee wellbeing
Engagement
Engagement is statistically linked to Customer Satisfaction (0.43), Innovation (0.43), and Profitability.
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Internal labor markets and promotion from within
Training ROI
Strong positive correlation (up to 0.66) between training investment and firm performance.
Strategic clarity, focus, and execution
Family Alpha
Family-owned firms generate a consistent ~3.7% annual excess return over peers.
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