Strong Focus on Risk Management

OC’s aim is to provide investors with strong long-term investment returns through a rigorous and sustainable investment process.

Our investment philosophy incorporates a strong focus on risk management which is reflected in our investment process.

• We consider risk as investing in what you don’t understand.
• Knowing what you are investing in means understanding the key business drivers.
• To understand the key business drivers we undertake intensive company analysis involving senior management and industry and competitive sources.

Bottom-up Fundamental Approach to Stock Selection

OC take a stock-specific, bottom-up approach to investment and does not have a particular style bias. In order to maximise the number of potential investment opportunities the Funds’ investment universe includes all companies listed, or about to be listed on the Australian Stock Exchange (ASX).

Despite the broad investment universe, the focus of our funds is generally on small to medium sized, profitable businesses, believing they are easier to understand with clear business drivers.  OC also considers the opportunities for significant growth of well positioned, managed and resourced small to medium sized companies are often greater than that of larger companies.

OC’s bottom-up approach is overlayed with a strong risk management process which takes into account macro themes and other issues impacting, or likely to influence markets.

Long-Term Investment Focus

OC’s investments are based on the ability to understand the business, meet the key management and have a clear comprehension of the business’s value drivers and hence the underlying valuation. As such, OC considers meetings with company management and site visits to be an important part of the investment process. A considerable proportion of OC’s investment research is dedicated to meeting with company management which we believe can provide substantial advantage in assessing the quality of the company and the likelihood of strong performance.

Residual Cash Holdings

OC’s flexible investment mandate extends to the portfolios’ cash holding, with cash being held until suitably attractive investments are discovered and purchased. We therefore do not invest to manage a specific cash weighting but invest only when we believe the value equation is compelling. As such the Funds’ cash weighting may vary significantly over time, depending upon the number of suitably attractive investment opportunities available.

Open Team Structure

OC’s value seeking approach allows individual investment team members to research and recommend an investment in any companies they believe offer compelling investment value. This open framework of responsibility facilitates the diversification of knowledge and responsibility, and therefore reduces our reliance on any individual member while increasing informed discussion of investment opportunities.