Investment Approach
Investment Philosophy
Markets can be emotional, backward-looking, inefficent
We believe this provides opportunities for prudent investors who make considered investment decisions based on thorough fundamental analysis.
Securities can trade below their intrinsic value
Detailed fundamental analysis provides the potential to find stocks with strong investment returns.
Risk can be reduced by investing in companies we understand
Knowing what we invest in means understanding the key business drivers, which involves intensive company analysis involving senior management, industry and competitive sources.
Investment Process
We take a bottom-up benchmark unaware approach to investment
As a specialist Australian small cap manager, we aim to be a safe pair of hands while providing investors with access to some of the most exciting investment opportunities in the listed equity market. We purchase securities that we believe are trading below their intrinsic value and have sound long-term investment fundamentals. This maximises the potential to achieve strong and consistently positive investment returns over the long-term.
​
Our investment process incorporates a strong focus on risk management. We will only invest in a company once we understand the full range of risks that it presents.
We meet with over 1000 companies a year
To understand the drivers of a business, we visit or engage directly with companies and talk to management regularly. We believe this gives us an analytical advantage.
Our investment process includes 4 key steps
In the initial screen, we aim to screen out unsuitable businesses, often due to not being profitable, too small, or unproven business model.
We rank stocks across a range of factors, such as management quality and business model. Stocks that do not meet a threshold are screened out.
We assess and rank the expected total returns for stocks, then build proprietary bottom-up stock models.
We assess our current stocks and potential inclusions and apply any required thematic overlays or constraints. Stocks with better risk/return characteristics are held at higher weights in the portfolio.