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Fairpointe Capital, LLC

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

Fairpointe Capital's investment strategy is designed to provide clients with superior investment results over the long-term.  Our main objective is to outperform our relative benchmarks, the broader indices and our peers over a full market cycle while managing downside risk. 

Fairpointe integrates structured ESG analysis with a bottom-up, fundamental valuation-based approach to investing.  We seek companies that adhere to principled corporate governance practices, that are environmentally accountable, and socially responsible.  In our fundamental valuation-based analysis, we look for a compelling business model, effective management, financial strength, and attractive valuation.  We prefer businesses with products or services that make their customers more efficient or profitable and are critical to their success.  Our goal is to select companies with favorable ESG characteristics that are inefficiently priced relative to their earnings growth outlook over the next three to five years. 

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Key elements of our invesrtment policy include our long-term approach to investing (3-5 years) coupled with our disciplined, fundamental, bottom-up valuation-based process to select companies that are inefficiently priced relative to their earnings growth outlook and the integration of ESG research. 

Fairpointe defines ESG as the integration of Environmental, Social and Corporate Governance factors into our investment analysis of portfolio companies.  We assess the materiality of various ESG concerns that may impact a company’s financial outlook as well as its reputation.  We utilize third party rating service to aid our research, but ultimately determine our own ESG rankings of each company

Fairpointe Capital takes our corporate ESG efforts seriously. In addition to the investment actions that are provided above, we have a committee to look at means to improve our firm’s performance. 

Fairpointe Capital works to reduce the firm’s environmental impacts. Efforts include: paper and plastic recycling, battery and toner recycling, encouraging employee use of public transit through pre‐tax qualified transportation benefits, discouraging the use of disposable dishes, use of conference calls instead of travel when possible, indoor plants to help clean and cool the air, and provision of filtered water instead of bottled.

Fairpointe Capital is a majority woman‐owned firm that offers excellent working conditions,employee compensation and benefits. In addition to corporate charitable donations, the firm offers matching donations so that employees can donate to their charities of choice. The firm supports volunteerism and Rock the Street, Wall Street, a financial literacy program for girls.

Fairpointe has an extensive privacy and data security policy. Audits by an outside firm are performed annually and have eight years of unqualified opinions. In addition, we believe our investment in companies and voting of proxies gives us a voice to improve corporate behavior.

We believe that both our internal and community actions should reflect the values that we require for companies we hold in our portfolio. 

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk (Private)


SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

As a fiduciary, Fairpointe has an affirmative duty of care, loyalty, honesty, and good faith to act in the best interest of its clients.  Complinance with this duty can be achieved by seeking to avoid conflicts of interest and by fully disclosing all material facts concerning any conflict that does arise with respect to any client.

All employees have a duty to report potential and actual conflicts of interest to the Compny

Fairpointe Capital employees are prohibited from buying indiviual securities.  Employees are able to invest in our strategies via a sub-advised mutual fund managed by the firm. No employee of the Company may accept a directorship of any publicly traded company or otherwise engage in any outside business activity absent approval by the CCO. 

Fairpointe has a Code of Ethics in place which outlines specific conflicts of interest.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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