We follow a long-term, valuation driven investment approach. Simplistically, we aim to position our portfolios to asset classes that offer reasonable value over a three to five year investment time horizon and avoid or minimize our exposure to asset classes that appear overpriced or expensive.

Our investment philosophy is anchored to the following principles:

  1. Appropriate investment horizons
    The longer the period of the investment, the higher the probability that markets reflect expectations.

  2. Exhaustive, considered research
    We know what we are buying. We prefer to miss opportunities, rather than invest in something we don’t understand.

  3. Prudent diversification
    We manage risk by aptly spreading clients’ exposure across independent holdings.

  4. Capital protection
    We focus risk management on the potential for loss. Avoiding large losses leads to better outcomes through compounding.

  5. Purchase valuation drives return
    We believe price is an imperfect proxy for value as sentiment drives price over shorter time periods.

  6. Cost management
    Irrespective of the source, lower costs are guaranteed sources of added value.

  7. Other people’s money
    We actively position investors interests first with sound stewardship principles to help clients meet their goals.

  8. Portfolio management matters
    We believe excellence in portfolio management is distinct from the ability to find good investments and must focus on a strategy’s objective and timeframe.

  1. Good fund managers exist and can be found
    There is no correct or incorrect approach to active management. Different approaches suite different skill sets. It is crucial to align a manager’s skill to the mandate.

  2. Beating the market is difficult, especially over short-term; therefore, evaluate managers over full market cycle
    It is not possible to consistently outperform the market over shorter periods of time. Long-term outperformance will almost always come with shorter periods of underperformance. The greater the degree of long-term performance, the greater the possibility of severe shorter-term underperformance.

  3. Investment philosophy and process of fund manager must be bought into
    It is crucial to identify, understand and buy into a manager’s particular ‘edge’ and why this is likely to add value over the longer term. Equally important is the understanding of the manager’s circle of competence, so that it is possible to determine when they stray from their core competency.

  4. Ensure stability and strength in the fund manager and team
    Continuity of key people and the investment philosophy is crucial for replicating past successes.

  5. Access to and transparency of fund manager/team is crucial
    It is critical to be able to have face to face time with one’s chosen fund manager and team. This allows one to make a true assessment of their character and personality.

  6. Alignment of interests
    Ideally, fund managers should own the businesses they work for, or at least be significantly invested in the funds they manage. This ensures long-term alignment between fund manager and investor.

  7. Act as stewards of capital
    There is evidence of a positive correlation between the stewardship ‘score’ of a fund manager and their performance track record.

  8. Size is a consideration
    In certain asset classes and markets, there is an advantage to managing a smaller pool of assets. The more concentrated/top heavy the asset class, the bigger the advantage of managing fewer assets.

  9. Separate operational due diligence
    Separate operational due diligence, with veto rights, is important to ensure the investment due diligence does not override operational issues.

  10. If in doubt, don’t choose

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