We believe that superior investment results can be achieved by following a proven, effective investment process. We follow a ‘bottom-up’ process to harness our investment philosophy in a disciplined, yet flexible manner – enabling creative and rigorous thinking.
Original research in pursuit of attractive investment opportunities
Most of our time is spent undertaking in-depth company, industry and individual security research. We aim to provide an accurate assessment of the relative merits of a particular investment and to identify the key drivers of its future cash flows. This forms the basis for detailed financial modelling and we are then able to calculate an investment’s intrinsic value.
We analyse relevant information to identify the sustainable, ‘normalised’ economics that impact an investment and its potential to generate cash flow. We also strive to understand structural and cyclical forces in operation, to adjust for temporary distortions to cash flows and to conduct long-term analysis of the history of the business and industry.
We pay particular attention to how our valuations could be wrong and derive a probability band around our central intrinsic value estimate.
Portfolio management that effectively balances risks and returns
Our portfolio managers are individually accountable for specific client mandates as we believe that this leads to better decisions. Our portfolio managers construct well-diversified portfolios, based on the investment opportunities uncovered by our proprietary research and analysis. Maintaining a patient, long-term outlook, they construct portfolios that balance expected returns from mispricings, perceived risks and available portfolio holding size. They pay careful attention to risk management – minimising ‘unrewarded’ risks and positioning for asymmetric potential results.