Investment philosophy

We adhere to a distinctive investment philosophy that we call Focus on Change. We believe that:

  • company fundamentals ultimately drive stock prices
  • the market is not efficient at pricing in these fundamentals when they are undergoing, or face the prospect of, material change
  • different fundamental factors matter in different circumstances or stages of the investment cycle.

The application of this philosophy helps us to analyse the key factors driving the market price of an investment and to identify the drivers that the wider market may not be pricing in. Understanding the dynamics behind these drivers is what allows us to focus on the factors that will cause the market to change direction, and ultimately produce a revised price. Our aim is to anticipate what is changing and to exploit this before the market view comes into alignment with ours. We have found that the best opportunities come from investments where we not only have the deepest insights but also the greatest conviction that market expectations are going to change.

A Focus on Change opportunity can come in many different forms, such as a company restructuring/internal self-help, top-line growth acceleration, change in industry competitive dynamics, changes to the regulatory environment or technology improvements. Such change often leads to an increase in earnings, but may involve a valuation re-rating or a corporate action that crystallises value or cash return. Our philosophy is therefore style agnostic and neither inherently growth or value biased nor momentum driven. This provides us with the opportunity to outperform throughout the cycle.

Our core belief is that our experienced investment professionals can consistently add value to client portfolios by exploiting these market inefficiencies. They do so using a robust and repeatable investment process that is highly disciplined, research intensive and risk informed.

Ensuring a consistent approach

We ensure discipline through the use of a common investment language, which provides a framework for deliberation and debate. It allows us to quickly communicate ideas and insights across our organisation. This is where our team-based approach comes into its own – by generating an information advantage, we can easily exploit our deepest insights and strongest convictions across all the portfolios we manage. Every investment decision we make must be justified by answering five key questions.

  • What are the key drivers?
  • What's changing?
  • What expectations are priced in?
  • Why will the market change its mind?
  • What is the trigger?

The more pieces of corroborating evidence we can amass, the greater the conviction we have on our investment positions.