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We believe the Asia Pacific region represents one of the most dynamic and prospective investment opportunities to be found anywhere in the world and have been investing profitably in the region since 2002. We offer clients a range of different investment strategies through which they can access the opportunities in the region.
Our investment philosophy
At the heart of our value-based investment philosophy is a high conviction strategy focused on stock selection, driven by in-depth analysis from our experienced team of investment professionals.
Our investment philosophy is based on the following key principles:
We are value investors
We believe that the price and value of a company are often not the same and deviate over time. ‘Price is what you pay, value is what you get’ best summarises this difference. Greed and fear in markets can drive a wedge between these concepts at the stock level and we seek to take advantage of this behavioural phenomenon. By being disciplined on what we will pay for an investment provides a margin of safety to ensure we are not exposed to speculative hype that often results in capital loss when sentiment reverses.
We believe stock valuations are driven by the financial performance of the underlying business. By always taking a long-term view, we can use periods of short-term pessimism to our advantage and buy good businesses at attractive prices.
We are bottom-up stock pickers
Value investing by its nature is done on a bottom-up basis. By virtue of the fact we are regularly looking at the unloved or unpopular segments of the market, there is often a narrative attached as to why they are out of favour. Only by researching these companies on a bottom-up basis (in conjunction with what prevailing valuations imply) can one determine whether the narrative is correct or indeed an opportunity exists.
We are often contrarian
Logic will tell you that to beat the average, one must do something different from the average. With share prices representing the market consensus, we will often move early and against the crowd to invest in undervalued companies that we believe will generate strong investment performance.
We use a well-established and rigorous investment process to identify companies that are currently trading at an attractive discount to their true underlying value. This disciplined approach helps us balance opportunities and risks in our portfolio construction.
This long-term view enables us to look through short-term market events and ‘noise’ to invest in good companies at attractive prices.
Our experienced investment team takes a collegiate approach that assists us in delivering long-term performance. All our portfolio managers are also analysts, emphasising the importance of our fundamental company research. Similarly, there is a strong alignment of interest with our clients with the key investment professionals retaining equity in the business and significant personal investments in our underlying vehicles.
We invest for the long-term
A key ‘ingredient’ of value investing is time. We believe that price and value can diverge by a wide margin in the short run. What has been proven over time however is that in the long run, they should converge. What drives this process? Some like to point to catalysts however in our experience is more likely than not the passing of time as the ‘darling’ stocks fail to live up to expectations while the ‘value’ parts of the market deliver better results than what their share prices were implying.
We have a four-year investment horizon, as we believe this allows the company’s true intrinsic value to be realised and our process is structured accordingly.
Our investment approach
Our investment process is focused on identifying companies that are currently trading at an attractive discount to their intrinsic value. Our process begins with utilising several quantitative screens designed to rank the investment universe and highlight prospective investments. Qualitative differences are also reflected to ensure higher quality but higher multiple businesses are not excluded for consideration. Stock ideas generated from the valuation screens then undergo in-depth fundamental and ESG research.
Our experienced team spends most of its time conducting detailed quantitative and qualitative analysis on these companies, ascertaining whether or not the company is undervalued relative to its prevailing price and its earnings potential. This includes identifying the key investment issues and risks, analysing the business and industry it operates in, as well as an assessment of management quality and ESG matters.
Our investment capabilities
Our Asia and Asia Pacific equity strategies
We actively manage portfolios that invest in Asian and Asia Pacific equity markets, excluding Japan.
We invest in listed (and to be listed) equities across Asia (ex-Japan) or Asia Pacific (ex-Japan). We may also invest in stocks listed outside Asia that conduct the majority of their operations in Asia.
We construct a diversified portfolio from the highest conviction opportunities which we expect to deliver strong risk-adjusted returns over the long-term. We invest across a broad universe of companies that generate the bulk of their revenues from region and typically hold 40–60 stocks.
We select stocks based on their perceived fundamental value and the potential for capital growth over the long term using our proven value investment philosophy and disciplined investment process.
Our bottom-up stock selection approach is based on detailed analysis prepared by our experienced investment team, with all investment decisions based on research prepared using internal forecasts and analysis.
Our Asian equity income strategy
We recently launched an Asian equity income strategy that provides investors with a portfolio exposed to both sustainable and growing income streams across Asia. It is benchmark unaware and comprises a high conviction portfolio of 25–40 securities with an emphasis on preserving capital and delivering favourable risk-adjusted returns.
There are many companies across the region with the financial means to significantly improve their returns to shareholders with more proactive capital management. By focusing only on companies with both the ability and intention to pay and sustain an attractive dividend profile, we believe we can offer a portfolio capable of delivering an attractive through the cycle total return with risk characteristics superior to that of the regional benchmark.
Our strict scrutiny with regards to balance sheet strength and cash flow generation will help to shield the portfolio from adverse impacts from changes in interest rates. As well as the rigorous quantitative screening, our experienced team of analysts applies a qualitative overlay to all portfolio holdings.
A team of experienced and dedicated investment professionals.