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Investment Strategy
OUR INVESTMENT PROCESS
As bottom-up stock-pickers, we build our portfolios on a company-by-company basis, irrespective of benchmarks, geography or sector allocations. Our on-the-ground investment teams conduct financial and extra-financial research. Our philosophy is that fundamentals prevail, with share price converging towards earnings per share (EPS) growth. To that end, we aim to construct portfolios that deliver double-digit aggregated EPS growth over a five-year investment horizon.
FOCUS
Our process begins with an overall review of the market to create a select “watchlist” of companies that meet our quality and growth criteria.
ANALYSE
We often conduct years of fundamental research to build an in-depth understanding of a company’s business model including analysis of fundamentals, identification of any controversial activities and engagement with management, competitors, suppliers, customers and sector experts.
WAIT
Our investment team creates a shortlisted “Universe” of investible companies that best fit our quality growth investment criteria. We monitor our opportunity set and invest only when valuation is deemed attractive – which can sometimes take years. Valuation is typically based on conservative, proprietary 5-year forecasts of earnings and dividends.
INVEST
We invest with a three-to-five year investment horizon, after building high-conviction, comprehensive views of select candidate companies and consensus through team-based discussions. Our focus is on quality and we build our concentrated portfolios of 25-50 stocks around this principle.
RISk MANAGEMENT
At Comgest, risk is viewed in an absolute sense, not relative to a benchmark. Our quality growth portfolios typically show high active share and lower long-term volatility than comparative indices. On an ongoing basis we monitor, amongst other aspects: fundamental risks and factors that may impact our EPS and valuation assessments; adherence to investment guidelines; regulatory restrictions; liquidity and performance. As all members of the investment team having been with Comgest for more than two years are also shareholders, they view risk from the perspective of a business owner.
Investment Strategy
