We invest in sustainable undervalued businesses based on year-three earnings, that we believe will not disappoint the market in the short-term
We use a repeatable four step process which is an effective application of our investment philosophy.
1. Idea Generation – We identify potentially mispriced companies by looking for changes within an industry or company, valuations vs. historical ranges as well as systematic screens and corporate events. Our experience, contacts and systems ensures that we capture all of the available opportunities.
2. Quality Score – We assess businesses on four qualitative factors with a dominant focus on ESG. This allows us to focus our research on sustainable businesses that have capable management, sustainable business models, quality earnings as well as competitive advantages and favourable industry dynamics.
3. Fundamental Research – We combine desktop-based research with ‘on the ground’ information gathering to identify the key drivers of the company’s earnings and ultimately to value the business.
4. Portfolio Construction – Once companies have passed both the Quality Score and Fundamental Research stage we assemble a portfolio of approximately 20-40 stocks with a strong emphasis on sustainable businesses and portfolio risk management. This aims to deliver a true-to-label portfolio with superior ESG outcomes compared to the market, as well as both lower volatility and higher Active Share compared to the benchmark.