Frequently Asked Questions

White Brook Capital is an investment advisor that manages separately managed accounts (SMAs) for accredited investors. We were founded in 2016 and are based in suburban Chicago. Our clients own individual portfolios of screened index exposure, ETFs, and individual stocks — held in the client’s own brokerage account — and we manage those portfolios on a discretionary basis.

It means two things, held together:

1. We exclude businesses we believe cause material harm — weapons manufacturers and defense contractors, surveillance firms, private prisons, tobacco, alcohol, gambling, adult entertainment, and predatory lenders — before we ever consider returns.
2. Within what’s left, we try to earn a market-competitive return by owning businesses we believe are underpriced relative to their long-term prospects.

We think investors shouldn’t have to choose between earning a return and sleeping at night.

ESG, as practiced by most of the industry, relies on third-party ratings that score companies on environmental, social, and governance metrics. Those scores drift, vendors disagree, and a company can be “ESG-approved” while still selling products we think are harmful.

We don’t use ESG scores. We use named categorical exclusions — a specific, published list of industries and business activities we will not own — applied internally by us. It is simpler, more transparent, and, in our view, more honest.

There is no “ethical sleeve” and a conventional sleeve. The exclusions are the strategy.

Basil Alsikafi is the founder and portfolio manager. He has close to two decades of public-market investing experience:

• Senior Analyst, MSF Capital (value-oriented hedge fund)
• Telecom Analyst, BBT Capital Management
• Investment Banking Analyst, Technology / Media / Telecom at JPMorgan
• MBA, Kellogg School of Management (Finance; Management & Strategy)
• A.B., Political Science, University of Chicago

He is based in suburban Chicago.

At a category level: weapons and defense, surveillance, private prisons, tobacco, alcohol, gambling, adult entertainment, and lenders whose business model depends on excessive interest rates or customers prone to delinquency.

Strictly. Our defense screen extends beyond prime contractors to include companies that derive meaningful revenue from servicing aerospace and defense clients — for example, certain software and IT-services providers that most “ethical” funds leave in because they don’t show up on a SIC-code filter. We’ve published a sample exclusion memo showing how we think through these edge cases; it’s available on request.

If a company is seeking to grow in an excluded activity we screen them out. This is a fundamental difference with other “ethical” funds. We understand what the companies do and their go-forward strategy.

Yes. While our core exclusion list is not negotiable, additional exclusions can be made. For instance, a client may not want exposure to the financial system. Those additional exclusions are easily incorporated.

It might. There are times when certain industries do better and others do worse. If defense and vice stocks outperform, we are more likely to underperform. If companies in other industries that have significant excluded activities and are therefore excluded from our strategy outperform, we are more likely to underperform. That’s very much a risk we and our clients have to be ok with.

Three, so we can match clients to the right mandate rather than force everyone into one box:

1. WBC Ethical S&P 500 Index — Screened S&P 500 exposure. For clients who want market-aligned returns with our exclusions applied.
2. WBC Ethical All Cap — A flexible blend of ETFs and individual stocks across market caps. No style, cap, or cash constraint — we position based on where we see opportunity.
3. Small Cap Absolute Growth — Concentrated, conviction-led small and micro-cap investing. Higher potential return, higher volatility, capacity-limited to $20 million total.

Fact sheets and presentations for each strategy are available on request.

Generally:

• Ethical S&P 500 Index suits clients who want broad U.S. market exposure, low tracking error to the market, and our exclusion set — often a core allocation.
• Ethical All Cap suits clients who want active management across the full market, including small and mid caps, with the flexibility to raise cash or rotate exposure.
• Small Cap Absolute Growth suits clients who can tolerate concentrated positions, illiquidity, and drawdowns in pursuit of multi-bagger outcomes.

Many clients hold more than one. We believe in and do our best to produce the best possible returns in all of the strategies.

The strategy is capacity-constrained at $20 million because the securities we own in it don’t accommodate much more. Availability changes with AUM and inflows/outflows — please ask.

Clients have full transparency into their holdings.

Accredited investors only. Under current SEC rules, that generally means an individual with (i) income over $200,000 in each of the last two years ($300,000 with a spouse) and a reasonable expectation of the same in the current year, or (ii) net worth over $1 million excluding primary residence, or (iii) certain professional certifications. We verify eligibility at onboarding.

In an SMA, you open a brokerage account in your own name at a qualified custodian, fund it, and grant us limited discretionary authority to trade it. You own the securities directly. We never take custody of your money — it stays with the custodian.

Compared to a commingled fund:

• Transparency — you see every trade and every position.
• Tax control — we can harvest losses and manage gains for your specific situation.
• Customization — additional personal exclusions or legacy positions can be accommodated.
• Liquidity — no lockups or gates; you can add or withdraw at any time, subject to normal settlement.

We consider relationships on a case-by-case basis and occasionally accommodate smaller accounts where there is a long-term fit.

Fees depend on the strategy invested.

Additional details are available in the firm’s ADV and in the investment management agreement.

Your assets are held in accounts in your name at Charles Schwab Inc. and/or Interactive Brokers Inc. We have trading authority only; we cannot withdraw funds from your account. All statements, trade confirms, and tax documents come directly from the custodian.

Yes, at any time, subject to normal trade settlement. There are no lockups. Because some of our small-cap positions are concentrated and less liquid, meaningful redemptions from the Small Cap Absolute Growth strategy may take a few trading days to complete at fair prices.

Yes. We can manage IRAs (Traditional, Roth, SEP, Rollover) and similar account types held at a qualified custodian. Please ask about eligibility for each strategy.

Quarterly at minimum. You’ll receive:

• A quarterly investor letter — we write honestly about what worked, what didn’t, and what we think comes next.
• Monthly custodial statements directly from your custodian.
• Ad hoc notes on material developments — earnings, acquisitions of holdings, changes to positioning.

You can also reach Basil directly at any time.

Our active strategies — Ethical All Cap and especially Small Cap Absolute Growth — are concentrated and can be significantly more volatile than broad-market indices. We think concentration is a feature, not a bug: it’s how we express conviction. It also means any given quarter or year can meaningfully diverge from the market in either direction.

Risk to us is the permanent impairment of capital, not quarter-to-quarter price movement. We manage risk by: (i) underwriting each business we own from first principles, (ii) sizing positions deliberately, (iii) maintaining liquidity to act when opportunities emerge, and (iv) being willing to hold cash when we can’t find ideas we like.

You own the securities directly, so you recognize gains, losses, and dividends at the individual level. We actively consider tax consequences in our trading — including loss harvesting and holding-period management — though the primary goal is after-tax investment return, not tax minimization for its own sake. We coordinate with your accountant as needed.

Yes. White Brook Capital is registered as an investment advisor. Our Form ADV Part 2 Brochure is available at adviserinfo.sec.gov/firm/brochure/283041.

We maintain a business continuity and succession plan covering portfolio management, client communication, and the orderly transition of client assets. Because your assets are held at a third-party custodian in your own name, your securities are not at risk from anything that happens to the firm.

No. We do not sell client information. We disclose it only as necessary to effect, administer, or enforce your transactions, or to service providers bound by confidentiality obligations. Full details are in our Privacy Policy.

Three steps:

1. Conversation — request a call through the website or email info@whitebrookcapital.com. We use this to understand your situation and make sure we’re a fit — in both directions.
2. Paperwork & verification — we verify accredited-investor status, walk through our Form ADV, investment management agreement, and strategy documents, and help you open (or link) a custodial account.
3. Funding & implementation — you fund the custodial account; we build your portfolio deliberately, often over a few weeks, especially for strategies that include less liquid names.

The paperwork can be done in minutes. We wait a week after the investment management agreement is formally signed to give clients the ability to change their mind without consequence.

Email info@whitebrookcapital.com.