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.
Talent quality, turnover, and employee wellbeing
High Turnover Firms Underperform by 3.5% Annually
Key Metric
3.5% Lag
Annual Underperformance of High-Turnover Portfolios
The Research
Is employee turnover just an HR headache, or a portfolio risk? Revelio Labs analyzed workforce data from thousands of public companies to track the relationship between attrition and stock performance. The findings were stark: a portfolio of companies with the highest employee turnover rates consistently underperformed the broader market by approximately 3.5% annually. Conversely, firms with stable workforces (low turnover) exhibited lower volatility and superior long-term compounding. The market often fails to price in the 'friction cost' of constantly replacing talent until it shows up as a margin miss.
Data Source:
Academic Source:
Key Finding
High turnover correlates with a 3.5% annual drag on stock returns.
The Archalos Thesis
We view turnover as a 'silent tax' on capital. High turnover forces a company to perpetually re-buy its own operational capacity, paying recruiting fees and training costs just to stay flat. This is a massive destroyer of ROIC. We treat low turnover not as a cultural 'nice-to-have,' but as a form of operational leverage. A stable workforce allows management to compound knowledge rather than constantly replacing it.
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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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