We travel and consult widely in order to find companies with Competitive Dynamics, having around 1,000 meetings a year. We pay close attention to the fundamentals of each business, analysing historic results, industry structure and recent commercial trends. We consider the opportunities the company faces in terms of both winning market share and industry growth rates. Finally we appraise management for its stewardship of shareholder’s capital and for its track record on environmental, social and governance issues. We are uncompromising in our standards and if the company does not meet our expectations on any of the above, we will not consider the company as a possible investment.
Valuation is critically important. Our detailed analysis culminates in an explicit projection of the cash-flows we expect to arise within the business. These projections are stress tested with regards to the size, timing and risks associated with the expected cash flows. Our Competitive Dynamics framework helps us challenge market expectations and deliver a more relevant valuation on the investment opportunity.
Risk management is important to us. It ensures that our portfolios reflect our stock-picking ethos and we are conscientious in measuring and managing the risk exposures within our funds.
The result is a selection of companies with strong Competitive Dynamics from around the world at attractive valuations, which we expect to create long-term value for shareholders.
