strat·e·gy
n. pl. strat·e·gies
    1. Unique activities.

Operational efficiency is not strategy. A company's strategy is defined by the things it does differently. The services it chooses to provide, and more importantly, the services it chooses not to provide.

Southbrook's Active Investment Strategy: Diverse Sources of Value
In a sentence, "Seize opportunities in the bond market caused by restrictions on other investors." For example, those using passive strategies such as indexing will not buy securities outside the index even if they yield more for the same amount of risk. In the same vein, investors who must purchase only the largest, most liquid bond issues miss out on smaller bond issues with higher yields. Private securities that are not registered with the SEC also offer a yield premium due to the fact that many investors are prevented from buying these securities by their own investment charters. Investors who do not purchase securities beyond a certain term of maturity, such as one year, introduce "term premiums" in which securities of longer maturities offer better relative value. Investors who cannot consider securities below a certain rating level such as "AA" or "BBB" may cause "credit premiums" on securities outside of that universe.

Tactical opportunities also arise periodically due to breaking news or credit events that affect issuers in the market. Due to a committee-driven investment process, large players are unable to respond in time to capitalize on these shifts in the market.

"Game theory" analysis of the MBS and ABS markets adds further performance. Knowing the characteristics of the issuers in the market is the first step to building a competitive portfolio. Knowing how the large investors in the market rank the issuers in the market and how this drives their portfolio strategy puts Southbrook in a position to outperform.