To identify potential investment opportunities, we screen the investment universe through:
- Our own exclusive or outsourced quantitative screening tools
- Attending conferences
- Extensive research
- Regular communication with our network of industry contacts
- We create a shortlist
Once we have identified potential investment opportunities, we do an initial analysis to eliminate any obvious non-candidates and create a shortlist.
- We then perform a detailed due diligence on the shortlisted companies
We focus on understanding each company’s competitive positioning within its industry, which affects the quality and earning power of the business, and what qualifies as a sustainable cash flow level. Based on this, we assess the company’s worth.
- Once we know a company’s worth, we consider its price and future valuation prospects
We want to buy assets that are undervalued, so we look for companies that are selling for less than what they are truly worth, not what the market thinks they’re worth. In addition to comparing current valuation and price, we use a fair value framework based on long-term returns to assess a range of possible outcomes relating to the company’s value.
- We work closely with the companies’ management throughout this process
The quality of management has a significant impact on the success of a business. We believe the best way to assess management is to evaluate their actions against what they have committed to in meetings, presentations and company financial statements in the past. Working closely with the management of the companies we want to invest in is therefore an important part of our process.
- Once we have completed our detailed analysis of the company fundamentals, the investment case is formally presented to the team for discussion.
- We will then decide either to invest in the company or not, or do additional research if we feel we need more information to make an informed decision.
- We do not follow the benchmark
This means the allocations in our portfolios are not dictated by benchmark weightings or sector exposure. Our portfolios may therefore look and perform differently than their respective benchmarks and peer groups.
- We aim to maximise long-term returns and minimise the risk of capital loss
Not being constrained by a benchmark helps us to achieve this objective, since we can explore alternative growth opportunities in the market irrespective of the benchmark weightings.
- We carefully consider the allocation to each investment
To determine how much to own of each business, we consider the potential returns, the level of conviction we have in the business, the liquidity of the overall portfolio, and the potential loss of capital.
- We constantly re-evaluate existing portfolio holdings
We will sell when the reasons why we initially invested have changed, when we believe the return and growth prospects are no longer as attractive, or when we identify better opportunities.
We do our own proprietary research to ensure independent views
We are willing to adopt significant positions where we have a strong conviction in our research results
Our investment allocations are not dictated by benchmark weightings, which enables us to optimise our portfolios for growth
We aim to limit the risk of capital loss by targeting risk-adjusted returns
Being patient and objective enables us to maximise the growth of our clients’ capital over the long term
Our incentive structure ensures that our interests are aligned with those our clients
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