We make investment decisions based on mispricings we observe in the market. Simply put, we buy investments that are priced below our considered assessment of intrinsic value and avoid those that we believe are overpriced.
Our fundamental research is valuation-based, we take a medium to long term view on the companies we own and we adapt to prevailing market conditions. The focus of our fundamental research is redirected as conditions change and, therefore, is applicable in most market environments.
We recognise that there is considerable danger in operating with the comfort of a false sense of certainty and the accompanying behavioural reinforcement cycles that lead to a distorted evaluation of new information. As a result, we understand that despite our best efforts we cannot possibly know all the facts.
This drives us to think more deeply, to work harder and to be more alert. We view the future in terms of probabilities, we explore alternative scenarios, diversify our positions, hedge risk and seek out potential asymmetries.
ESG considerations are an important part of our overall investment process. ESG integration into the investment process includes quantitative analysis of material ESG factors and inclusion of those in the valuation process. Incorporating ESG is a dynamic process that often requires a different approach for each company. We therefore spend a lot of time understanding the specific ESG issues a company faces and how we can best incorporate it into our investment thesis.
Once we own a company we become active owners by voting responsibly and engaging with companies on material ESG risk factors that impact valuation where we can have the most impact for our clients.