FAMA Investimentos is a Brazilian independent owned listed equity long only manager, founded in 1993 by Fabio Alperowitch and Mauricio Levi, who have worked together since the inception. FAMA manages a single strategy with a concentrated portfolio of Brazilian companies listed on local stock exchange (B3), that aims to maximize returns for our investors, delivering significant alpha against the benchmark index and competitors. FAMA employs a fundamental bottoms-up approach, with in-depth research and long-term orientation, to obtain compounding gains. Our fund provides a differentiated portfolio as a result of a proven and effective investment process. Governance, alignment of interests, character and ethics are a focus and fundamental part of our research and business. FAMA seeks to have a portfolio of high-quality companies, with strong management teams, healthy balance sheets and good corporate governance, as well as management of environmental and social aspects that are material to their business.
At FAMA, ESG integration is not a recent development, FAMA is a signatory of the UN-PRI since 2011 and CDP since 2019.
Integrating ESG factors is part of our investment process, in which we aim to analyse a company in a holistic manner, examining economic, financial, environmental, social and governance issues in a unified way. In addition, the analysis with ESG integration is applied to investment decisions, so that portfolio managers are well informed about the company's financial potential and also opportunities, challenges and risks arising from ESG factors.
By integrating ESG into the process, we are ultimately focusing on finding better investment opportunities, because company managers who are concerned with long-term sustainability tend to reduce risks and future cash flow volatility and increase returns.
FAMA considers ESG integration a very powerful risk control tool. FAMA uses negative screening as a first step in the ESG integration process, followed by a qualitative analysis of ESG information, public data, ESG research and engagement results. For FAMA sustainability, in the broad sense of the word, means reducing the uncertainty of an uncertain cash flow and companies with a strong ESG culture tend to think long term and, generally, that is the reflection of a good management team. Reflections on ESG are helpful in understanding the quality of a business and there should be no tolerance for unethical behaviour. ESG deals with opportunities and risks, upsides and downsides, so integrating ESG into processes means fully understanding the company, its options, challenges and risks.