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Investment Process

Our investment process 

"We believe a consistent and disciplined process is crucial to achieving strong and rewarding portfolio outcomes for our clients."

  • Process proven by a strong record of first-quartile performance
  • Macro-economic trends and behavioural finance are important considerations
  • Detailed modelling forms the cornerstone of our process

 

Rigorous and disciplined process proven by solid performance

Proven by a strong record of first-quartile performance, our proprietary investment process combines our:

  • Unique company insights based on our deep industry knowledge and fundamental bottom-up company analysis
  • Top-down consideration of the macro-economic environment and an appreciation of behavioural finance
  • Innovative portfolio construction methods that we continuously refine in the context of ever-changing markets.

“We believe investing in quality companies at attractive valuations can produce the best results for our clients over time.”

By applying strict criteria when assessing companies, we invest only in those we determine to have sound fundamentals and sustainable competitive advantages. This results in our construction of high quality, concentrated Australian equities portfolios.

 

Selecting companies and constructing portfolios

Our proprietary process distils a vast array of data to:

  • Forecast company returns
  • Forecast company risk
  • Rank companies by expected risk-adjusted returns

It comprises two broad stages:

  1. Selecting companies
  2. Constructing portfolios

 

 

Selecting companies

We begin by researching and analysing the Australian and global economies and markets to assess how future changes may impact on Australian company revenues, costs and profits. We gather qualitative and quantitative data by engaging with  company management.

"Central to our company selection process is separating the assessment of company quality from the calculation of company value or, separating ‘what to buy’ from ‘how much to pay’. For us, ‘what to buy’ is more important than ‘how much to pay’. The practical effect is portfolios comprising companies we consider to be of the highest quality, rather than the lowest price."

 

Constructing portfolios

"When constructing your portfolio, we seek to build a set of assets that aim to help you achieve your investment goals."

Forming the cornerstone of our company selection process and integrating with our portfolio construction disciplines, the outputs of our models provide us a list of  ‘superior’ and ‘good’ companies eligible for inclusion in portfolios.

 

After skewing portfolios to have the desired style and size characteristics and applying a strict risk management regime, our final portfolios only incorporate our best investment ideas and typically comprise 20 to 30 high quality, mid- to large-capitalisation Australian companies that we believe can add the most value for our clients.

Please contact us for more detailed information on our investment process.

 

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