Management & Investment Process

Management

The investment team leverages high degrees of experience and knowledge within a disciplined investment process. Learn more about the Team.
  • Christopher Smith
  • Portfolio Manager
  • 21Years Investment
    Experience

Investment Process

The team’s investment approach is based on idea generation, a systematic framework for analyzing companies and proactive risk management. Utilizing this approach, the team seeks to construct a focused portfolio designed to maximize alpha while limiting downside risk over the long term.

Idea Generation

  • Identify inflections in multi-year trends caused by changes in supply/demand dynamics, societal behavior, market conditions, technology, laws/regulations and business models, among other variables—these can lead to powerful re-ratings of industries and companies
  • Find areas where the team’s views on industry fundamentals differ from consensus estimates—a key element in alpha generation

Systematic Analytical Framework

  • Apply a systematic framework for analyzing companies across sectors and themes, creating a repeatable and methodical decision-making process
  • Focus on multi-year earnings power differentiation, expected outcome scenario analysis, return on invested capital and discounted cash flow valuations using the team’s proprietary company models
  • Utilize internally developed visual outputs to consistently evaluate positions across the portfolio

Proactive Risk Management

  • Incorporate risk management into all stages of the investment process
  • Evaluate metrics including crowding, correlation, volatility, stress tests, liquidity, factor analysis and macro drivers, in order to inform portfolio construction and position sizing
  • Where appropriate, use various instruments, such as options, in an effort to magnify alpha and minimize downside

Other Strategies Managed

Non-diversified portfolios may invest larger portions of assets in securities of a smaller number of issuers and performance of a single issuer may have greater impact to the portfolio's returns. Use of derivatives may create investment leverage and increase the likelihood of volatility and risk of loss in excess of the amount invested. Entering into short sales involves certain risks, including additional costs involved with covering the short sale and losses due to the security’s value increasing, which is, theoretically, unlimited. High portfolio turnover may adversely affect returns due to increased transaction costs and creation of additional tax consequences. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid and may have underperformed securities of large companies during some periods. International investments involve special risks, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging and less developed markets, including frontier markets. 

Important Disclosures