Global Equity Observer • 27-Nov-2023 | |
Executive pay: “Show me the incentive and I will show you the outcome”
Bruno Paulson
As long-term investors, we want our companies’ pay plans to encourage longer-term thinking over short-term opportunism. We favour incentive schemes that align goals with shareholder interests, structured on sensible and disciplined performance-based targets. And we take the compensation process seriously, with our proprietary Pay X-Ray scoring system and established principles based on 20 years of talking to companies about executive pay.
|
Global Equity Observer • 30-Oct-2023 | |
Walled Gardens: The Slow Burn AI Winners
Bruno Paulson
Alongside the early winners of the AI gold rush, the International Equity Team believes there are others for whom the benefits of GenAI will take longer to emerge but will be significant over time. These “slow burners” will not only generate value from AI, but also have the pricing power to hang on to the resulting benefits. This challenge is easier in relatively closed systems, or “Walled Gardens,” that include proprietary data.
|
Global Equity Observer • 06-Oct-2023 | |
Finding Diamonds in the Rough? Searching for Quality in Financials
Isabelle Mast
Financials is a value sector – typically cheap and quite frequently not so cheerful. Or is it? We believe that select high quality companies within financials do exist and make excellent candidates for our portfolios. Well-managed companies with strong intangible assets in balance-sheet light subsectors such as exchanges, payments and insurance niches can achieve the combination of high returns, moderate cyclicality and recurring revenues that we favour.
|
Global Equity Observer • 28-Aug-2023 | |
Good Things Come to Those Who Wait: An Argument for Long-term Thinking
William Lock, Annabel Stanford
While society may be driven by immediate rewards, the International Equity team would argue that patience in investing leads to enduring results and positive long-term investment outcomes.
|
Global Equity Observer • 31-Jul-2023 | |
Compounding Through the Hype
Bruno Paulson, Emma Broderick
As artificial intelligence enters its next chapter, the early winners of the “AI gold rush” have been the semiconductor and cloud computing providers. But the surge in generative AI also included two surprises: the speed of consumer adoption and the lack of barriers to entry. While the full impact of AI remains unclear, the International Equity Team continues to invest through its high-quality lens, focusing on further opportunities in cost reduction and value creation, and with an eye on risks.
|
Global Equity Observer • 29-Jun-2023 | |
To Buy or Not to Buy
Marcus Watson and Richard Perrott
In the world of M&A, not all acquirers are equal. The International Equity Team is cautious of M&A, typically a high-risk choice for a company’s capital allocation. But there are companies out there—some of which they own—with a track record of relatively low-risk acquisitions that add meaningfully to shareholder returns. Good acquirers are a rare breed, but there are common characteristics to their strategies that suggest it is a repeatable process.
|
Global Equity Observer • 31-May-2023 | |
Building Resilience with Quality Capital Allocation
Alistair Corden-Lloyd
The resilience to navigate the sorts of global challenges we’ve seen over the last few years requires quality capital allocations. We’ve seen remarkable resilience in our holdings because the companies we look for exhibit deep, wide and well-managed economic moats that protect and grow market share, sustain or improve profitability, and potentially deliver attractive long-term returns. But maintaining those moats requires sustained investment in the unique attributes of the company’s offerings.
|
Global Equity Observer • 08-May-2023 | |
Reckoning Deferred
Bruno Paulson
The equity market looks complacent. In the face of continuing wage inflation, pessimistic bond market signals, tightening lending standards, low small business confidence, falling GDP forecasts and weakening consumer expectations—in short, a possible, even probable, U.S. recession—it continues trading on high multiples. This is a concern if you believe the economic reckoning was merely deferred rather than avoided.
|
Global Equity Observer • 23-Mar-2023 | |
Diagnostics: The Workhorse of Improving Health Outcomes
Helena Miles
What constitutes a valuable health care intervention? The International Equity Team believes that wider use of diagnostic testing and early screening can significantly improve patient outcomes and help optimize health care expenditure. For investors, diagnostics companies offer high returns on operating capital employed, underpinned by barriers to entry, recurring revenues and nondiscretionary end-market demand.
|
Global Equity Observer • 01-Mar-2023 | |
Welcome to the Multi-Stage Life
Emma Broderick, Jinny Hyun
Which companies are well placed to capitalize on the long-term behavioral and lifestyle changes that a multi-stage life might bring about? The International Equity Team discusses.
|
Global Equity Observer • 26-Jan-2023 | |
The Multiple's Gone. Are Earnings Next?
Bruno Paulson
Despite an anticipated recession, forward earnings estimates remain remarkably healthy. But, asks Bruno Paulson, is earnings pain on the way?
|
Global Equity Observer • 23-Dec-2022 | |
When Money Isn't Free
Anton Kryachok
As higher interest rates make it harder to engineer growth through debt, we think the relative value of businesses that can grow organically should only go up. Learn how our companies are better placed to use their balance sheet resilience to enhance their competitive positions, increase the sustainability of return on operating capital employed (ROOCE) and drive steady, predictable growth.
|
Engagement Report • 12-Dec-2022 | |
Engage Autumn 2022
International Equity Team
The latest edition of Engage, the International Equity Team’s semi-annual update on their ESG engagement activity.
|
Global Equity Observer • 25-Apr-2022 | |
Diversity – Asking Difficult Questions
Bruno Paulson, Marte Borhaug, Alistair Corden-Llyod
Across the globe, stakeholders – including the International Equity Team – are pushing companies for greater transparency and accountability on Diversity, Equity & Inclusion. The team discusses.
|
Global Equity Observer • 30-Dec-2021 | |
To the Moon? Quality Investing and Blockchain
Alex Gabriele
Blockchain technology not only underpins cryptocurrencies but has the potential to alter existing industry dynamics and encourage cooperation among natural competitors, resulting in greater efficiencies and higher quality. Alex Gabriele of the International Equity team explains.
|