Investment Process

The Fund uses a top-down thematic investment process combined with forensic bottom-up analysis. The investment team searches for companies exhibiting high quality metrics with attractive valuations using a combination of qualitative and quantitative analysis.

We also try to exploit cognitive dissonance in investor behaviour by using known long-term indicators of forward prediction including momentum, and by taking into account insider behaviour.

A new position is only opened following forensic research by the Investment Committee. A key consideration is that the company operates in an area that we understand at a fundamental level and that it has the long-term performance we expect.

When we find companies that meet our investment criteria, we will often stay invested for years, averaging up and engaging with their management to check on progress and watching out for signs of hubristic behaviour which can lead to diworsification.

Key factors informing our investment decisions
  • Quant Factors

    Total shareholder yield, price-to-sales ratio, price-to-book ratio, insider behaviour, long-term earnings growth, mid-cycle P/E divided by non-cyclical P/E and others.

  • Quality of Management

    Making an assessment of the correlation between the CEO’s past predictions in legally binding regulatory reporting against the observed outcomes.

  • Momentum

    Using quant preferred results, currently 6-month, as a predictor of future returns.

  • Low levels of debt

    Both in relation to the company itself and the industry in which it operates.