As active equity specialists, we build global, stock-driven portfolios based on bottom-up fundamental research. We recognise that while analysis of near-term prospects for a company will always be important, the majority of the value of a company lies in its ability to generate sustainable long-term returns.
By examining governance and sustainability factors in every company we research, we develop a deeper understanding of the companies we invest in and higher conviction in their ability to outperform over the long term for our clients.
We approach responsible investment in three ways:
Consideration of ESG factors is fully integrated into our investment process, having been a standard component of our stock research template since 2009. Far from a tick-box exercise, this information is exposed to peer review as part of our process for building an investment case. As with the fundamental analysis of financial factors, we only focus on ESG factors that are relevant and material to the investment case.
Active ownership or 'monitoring and engagement' are essential parts of being a shareholder. It allows us improve our understanding of investee companies and their governance structures, so that our voting decisions may be better informed. The materiality and immediacy of a given issue will generally determine the level of our engagement.
We work with a number of segregated clients, tailoring their portfolio to avoid securities of specific companies or countries based on their ethical or values based concerns. The most common exclusions are no involvement in tobacco products, alcohol, armaments, cluster munitions, nuclear and contraception. We do not have a house policy on this but will incorporate specific requests from our clients.