Tailwinds

Tailwinds

Tailwinds

 
 
Summary

Morgan Stanley Tailwinds seeks long-term capital appreciation by investing in high-quality established and emerging companies with capitalizations within the range of companies included in the Russell 1000 Index. To help achieve its objective, the investment team seeks companies that are aligned with and support positive environmental or social trends, while having sustainable competitive advantages, strong free cash flow yields and favorable return on invested capital trends. The team focuses on long-term growth rather than short-term events, with their stock selection informed by rigorous fundamental analysis.

 
 
Investment Approach
Philosophy

Counterpoint Global believes that it may achieve value-added investment results more consistently through bottom-up analysis and qualitative judgment rather than top-down forecasting. Additionally, the team holds that optimal stock selection is primarily a function of making long-term investments in companies that stand to benefit from the shift to a more sustainable economy, while also benefiting from: inherent sustainable competitive advantages; brand-name recognition; the ability to redeploy capital at high rates of return; and strong free-cash-flow yield three to five years in the future. These characteristics, in the team's view, provide the potential for consistent long-term growth and competitive returns.

 
Differentiators
Aligned with Clients

Counterpoint Global’s long-term incentive compensation program requires investors to allocate a significant portion of deferred compensation into the portfolios they manage.

CROSS-DISCIPLINARY THINKING AND RESEARCH INTO EMERGING THEMES

Their generalist approach and disruptive change research are unique in an industry that leans toward specialization. They promote cross-disciplinary thinking where investors follow areas with distinctly different business models.

CULTURE

Counterpoint Global has a distinctive culture that encourages innovation, evolution and continued learning.

EXPERIENCED AND STABLE TEAM

The team has been managing money since 1998. They have a long-term investment horizon that promotes perspective and insight.

 
 
 
Investment Process
1
Idea generation

Idea generation starts from the perspective of Sustainability, with eligible companies involved with business activities or market opportunities that align with a sustainability-related benefit to people (such as Economic Empowerment; Health; Access Democratization or Inclusive Communities), planet (such as Resource Efficiency or Downstream Efficiency) or systems (such as Data Security; Effective Institutions; Stakeholder Cultures or Structural Longtermism). 

2
Bottom-up analysis and valuation

Quality criteria includes durability of competitive advantage, distinctive company culture, growth and profitability optionality, while also emphasizing long-term secular changes and disruptive change and technology. Valuation focuses on a financials first analysis with impact internalization (an indication of intangible value and quality of business).

3
Disruptive change research

To complement its in-depth, bottom-up research, the team's disruptive change researchers investigate big ideas and emerging themes that may have far-reaching consequences, such as artificial intelligence and blockchain.

4
Consilient research

An additional complement to its analysis is the team's consilient researchers who investigate ideas and novel insights across disciplines for sharper decision-making. For example, the team leverages these researchers work and machine learning that groups similar businesses in a proprietary clustering tool that gives them a unique way to analyze divergence from the benchmark.

5
Portfolio construction and implementation

The team's portfolios are actively managed and built to maximize expected value. Company weightings are primarily determined by the quality of the idea and the team's conviction. For Tailwinds, Thomas Kamei leads decision-making along with the investor responsible for a company. The team's goal is to construct a high active share portfolio with intentional exposures, rather than manage to a benchmark target.

counterpoint-partnership
 
 
Investors  
Thomas Kamei
Executive Director
12 years industry experience
Dennis Lynch
Head of Counterpoint Global
30 years industry experience
Sandeep Chainani
Managing Director
28 years industry experience
Armistead Nash
Managing Director
24 years industry experience
David Cohen
Managing Director
36 years industry experience
Alex Norton
Executive Director
29 years industry experience
 

May not represent all Investors.

 
 
 
 
 

RISK CONSIDERATIONS

Diversification does not protect you against a loss in a particular market; however it allows you to spread that risk across various asset classes.

There is no assurance that a Strategy will achieve its investment objective. Portoflios are subject to market risk, which is the possibility that the market values of securities owned by the portfolio will decline. Market values can change daily due to economic and other events (e.g. natural disasters, health crises, terrorism, conflicts and social unrest) that affect markets, countries, companies or governments. It is difficult to predict the timing, duration, and potential adverse effects (e.g. portfolio liquidity) of events. Accordingly, you can lose money investing in this strategy. Please be aware that this strategy may be subject to certain additional risks.  In general, equities securities’ values also fluctuate in response to activities specific to a company. ESG Strategies that incorporate impact investing and/or Environmental, Social and Governance (ESG) factors could result in relative investment performance deviating from other strategies or broad market benchmarks, depending on whether such sectors or investments are in or out of favor in the market. As a result, there is no assurance ESG strategies could result in more favorable investment performance. The fund relies on other parties to fulfill certain services, investments or transactions. If these parties become insolvent, it may expose the fund to financial loss. Sustainability factors can pose risks to investments, for example: impact asset values, increased operational costs. There may be an insufficient number of buyers or sellers which may affect the funds ability to buy or sell securities. The value of the investments and the income from them will vary and there can be no assurance that the Fund will achieve its investment objectives.

This communication is only intended for and will be only distributed to persons resident in jurisdictions where such distribution or availability would not be contrary to local laws or regulations.

There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market. Past performance is no guarantee of future results.

A separately managed account may not be appropriate for all investors. Separate accounts managed according to the Strategy include a number of securities and will not necessarily track the performance of any index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. A minimum asset level is required. For important information about the investment manager, please refer to Form ADV Part 2.

Any views and opinions provided are those of the portfolio management team and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. Furthermore, the views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring. The views expressed do not reflect the opinions of all portfolio managers at Morgan Stanley Investment Management (MSIM) or the views of the firm as a whole, and may not be reflected in all the strategies and products that the Firm offers.

All information provided has been prepared solely for information purposes and does not constitute an offer or a recommendation to buy or sell any particular security or to adopt any specific investment strategy. The information herein has not been based on a consideration of any individual investor circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice. To that end, investors should seek independent legal and financial advice, including advice as to tax consequences, before making any investment decision.

OTHER CONSIDERATIONS

The indexes are unmanaged and do not include any expenses, fees or sales charges. It is not possible to invest directly in an index. Any index referred to herein is the intellectual property (including registered trademarks) of the applicable licensor. Any product based on an index is in no way sponsored, endorsed, sold or promoted by the applicable licensor and it shall not have any liability with respect thereto.

The Russell 1000® Index is an index that measures the performance of the 1,000 largest companies in the Russell 3000 Index. The index is unmanaged and should not be considered an investment. It is not possible to invest directly in an index.

The information presented represents how the portfolio management team generally implements its investment process under normal market conditions.

Morgan Stanley Investment Management is the asset management division of Morgan Stanley.

 

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