Strategy Inception
2004
Strategy AUM (USD)
$755 M
As of 11/30/2024
Our absolute value investing approach seeks deeply discounted, out-of-favor companies at security prices dislocated from their long-term value. These undervalued companies provide capital appreciation potential as they approach their true worth.
Margin of Safety Concept
A security’s dislocation from true intrinsic value designed to minimize downside and provide capital appreciation potential for the portfolio. This concept:
Is a key component of the value investing
Provides room for error in judgement or unexpected events
Seeks a significant discount from our intrinsic value estimates to be considered prior to purchase.
Our Approach to Deep Value Investing
We evaluate three important factors in analyzing companies to determine their level of value and quality:
True to Style
Focus on absolute vs relative value, value vs benchmark and deep discount estimates
Benchmark Agnostic
We maintain investment flexibility, value tilt and high active share
Uncorrelated Alpha
Seek low correlations with value peers and negative correlations to core/growth managers
An Approach Striving to Deliver Strong Long-term Performance
✓ True to Style
✓ Benchmark-Agnostic Approach with History of High Active Share
✓ Uncorrelated Source of Alpha
Our disciplined, bottom-up, fundamental research process determines intrinsic value and a downside and fair value potential for each security to construct its portfolio.
Disciplined Investing Approach
A broad opportunity set and idea generation drives intrinsic value determination, portfolio construction and sell discipline.
Idea Generation
Non-U.S. Stocks with market caps greater than $1B USD
• Universe of over 4,000 companies
• Focus on low price/value characteristics
• Bias for companies conservative with capital structures
Intrinsic Value Determination
• Conduct fundamental research using reasonable assumptions
• Employ a long-term, private equity-like mindset to valuation
• Apply a margin of safety
Portfolio Construction
• Concentrated approach
• Benchmark-agnostic
Turnover a by-product of investment process
Determining Intrinsic Value
Fundamental Research
Evaluating profitability assessment, balance sheet review, industry dynamics and country risks
Private Equity Ownership Mindset
Investment attributes considered include earnings, book value, replacement value and discounted cash flow
Margin of Safety
Apply concept to minimize downside risk with upside potential. Seek a 30% margin at initiation (buy at 70 Cents on Dollar)
Sell Discipline
Applied as stock approaches estimate of intrinsic value. Also sold due to change in company fundamentals, rebalancing needs, or if better value alternatives exist
Global Value Equity Team
Averages 15+ years of industry experience
Team manages over $47 billion in AUM
Portfolio Managers
Bert Whitson, CFA
Portfolio Manager
Senior Investment Analyst
Firm Start
2017
Industry Start
2001
Firm Start
2017
Industry Start
2008
| Average Industry Experience | 19 Years |
| Assets Under Management | $755 M USD As of 11/30/2024 |
| Location | Santa Clara, CA |
Cross-Discipline Support
Client Portfolio Managers
Investment Analysts
Global Equity Trading
ESG & Investment Stewardship Team
Takeaways
A strategy of 40-60 mid to large, non-U.S. companies trading at significant discounts to intrinsic value.
Our bottom-up, benchmark agnostic research process seeks steeply discounted, out-of-favor stocks across many market segments.
We seek to deliver long-term realized gains and downside protection as our investments approach their intrinsic value.
Risk management does not imply no risk.
High-quality companies are typically those that exhibit high, stable and sustainable returns on capital, attractive free cash flow generation, low financial leverage, and franchise sustainability.
Sources: MSCI Inc., FactSet
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