Our value investment process emphasizes bottom-up fundamental research, using both quantitative and qualitative techniques.
Screening of the Universe
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.
100+European Holding Companies
100+Asian Holding Companies
100+Property Companies conglomerates
Detailed models for c.400 companies
Discount range from 75% discount to 25% premium
North America, Europe and Asia.
Discount range from 50% discount to 15% premium
Non-US listed closed-end funds majority London-listed.
90% discount to substantial premium
Conglomerates and other asset backed companies
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
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
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