Investment Philosophy – We add Value by investing in companies with consistent earnings growth and minimize permanent loss of capital

Five Investment Characteristics

  • Absolute Return Focused
  • Consistent Mid-Term Value add within Long-Term Investment Horizon (5+ years) results in Low portfolio Turnover
  • Preference for Low Cyclicality
  • Always aim to minimize Permanent Loss of Capital
  • Bottom-up Stock Selection based on Fundamental Research

Stock Screnning Process

  • MSCI World/EAFE Index (2,000/1,000 companies)
  • Exclude market cap less than US$1bn
  • Eliminate Industries with no growth
  • Avoid deep Cyclicals
  • Reject non regional/global leaders
  • Investible Universe
  • =Approximately 250/150 Companies

Investment Process

Growth Objective

  • Consistent revenue growth of 4% and Earnings growth of 10% while weeding out value traps
  • Identify secular industry growth trends and value drivers
  • Evaluate Consistency of Growth

Strong Barriers to Entry

  • Intensive industry/company analysis to identify competitive advantages and barriers to entry
  • Detailed assessment of barriers to entry to ensure strength of the business model
  • Re-assess new industry factors that may permanently dislocate our investment thesis

Capable Management

  • Evaluate operating track record and value creation (ROE, ROA),
  • Assess Shareholder friendly behavior with 4 key factors; Capex, M&A, Share buyback/dividend, Use of Debt)
  • Extensive field research, surveys and key meetings with management, competitors and industry experts

Attractive Valuation

  • Examination of complete company financial filings and publications
  • Detailed financial analysis and DCF modeling Intrinsic valuation calculations based on free cash flow, operating earnings and sum-of-the-parts

Value Creation

Capital Stewardship

Discipline

Accountability

Diversity of Mind