Our process

We aim to achieve long-term capital growth by investing in a diversified portfolio of companies whose shares are trading at a discount to what we perceive to be their estimated net asset value.

Investment process

Our value investment process emphasizes bottom-up fundamental research, using both quantitative and qualitative techniques.

#1

Screening of the Universe

#2
Filtering
#3
Research
#4
Portfolio construction

Our screening process starts by looking at an investment universe which consists of global holding companies, closed-end funds and asset backed companies.

We have detailed models on approximately 400 companies out of this universe, which track stock prices and earnings information.

We monitor

  • 100+
    European Holding Companies
  • 100+
    Asian Holding Companies
  • 650+
    Non-US listed closed-end funds
  • 100+
    Property Companies conglomerates

Detailed models for c.400 companies

90
European Holding Companies

Discount range from 75% discount to 25% premium

140
Property Companies

North America, Europe and Asia.
Discount range from 50% discount to 15% premium

60
Closed-end funds

Non-US listed closed-end funds majority London-listed.
90% discount to substantial premium

40
Other

Conglomerates and other asset backed companies

#1
Screening of the Universe
#2

Filtering

#3
Research
#4
Portfolio construction

Throughout the filtering process we ask the following questions:

  • Is the stock trading at the wider end of its discount range
  • Are we comfortable with the NAV
  • Do we like the valuations
  • Do we want to own the underlying businesses
  • Does the business have a strong balance sheet
  • Is the company headed by an honest, intelligent management team with a good track record who is willing to engage with shareholders
  • Can we see a catalyst to bring the NAV back to its true value
  • Is the political and economic environment amenable
#1
Screening of the Universe
#2
Filtering
#3

Research

#4
Portfolio construction

Our analysts track stock prices, earnings and balance sheet information with an aim to identify good quality companies trading on a discount to their NAV which exhibit clear trends to create long-term value. Research includes:

  • In-depth analysis of company annual reports and filings
  • Consulting with industry contacts and brokers
  • Bottom-up analysis of a company’s fundamentals, management and industry trends
  • Specific focus on identifying the catalyst which will reduce the discount and unlock value
  • Regular meetings with top level management
#1
Screening of the Universe
#2
Filtering
#3
Research
#4

Portfolio construction

The objective of our portfolio construction process is to end up with a concentrated portfolio of about 50-60 holdings, facilitating a clear monitoring process of the entire portfolio.

We pick stocks that meet our investment criteria and once we decide to invest we seek a minimum position size of approximately 2% of the portfolio, however the timing of the catalyst and the liquidity of the stock can result in the holding being greater or lesser than 2%.

Factors which will impact the sizing of a position

  • Liquidity
  • Diversification
  • Discount