We seek to achieve the best returns for our funds without wrecking the planet and, where possible, backing companies that are cohesive and inclusive. We lean towards companies which contribute to – and even create – a cooperative society around them.
To give ourselves the highest chance of superior returns, we invest in US small-cap value which is the best long-term asset class in the world (Fama-French et al, 1990).
We identify long-term themes based principally on demographics but also taking sociological, psychological and macro-economic factors into account to further increase our tailwind.
We forensically examine those stocks within our theme that meet our due diligence and valuation criteria for investment to predict future performance. We sometimes end up as the sole institutional investor in a stock. Our stocks are frequently not covered by Wall Street nor are they in myriad indices or ETFs.
When a stock has jumped through all our hoops and keeps on going, we will often stay with it for years. There are stocks currently in our portfolio that we have held since 2005.
To circle from micro consideration back to our first macro objective: companies that are happy inclusive places to work are members of an outperforming asset class.
For more information on our investment process and ESG scoring click here.