Estrategias
Active Fundamental Equity
Asia Opportunity
|
|
Asia Opportunity
|
|
Estrategias
Active Fundamental Equity
Asia Opportunity
|
|
Asia Opportunity
|
As part of the larger Counterpoint Global Team, the Global Opportunity Team believes that it may achieve value-added investment results more consistently through bottom-up analysis and qualitative judgment rather than through top-down forecasting. Additionally, the team holds that optimal stock selection is primarily a function of making long-term investments in companies with: inherent sustainable competitive advantages (such as a patent portfolio, a network or community effect, etc.); brand-name recognition; the ability to redeploy capital at high rates of return; and strong normalized free-cash-flow yield. These characteristics, in the team’s view, provide the potential for consistent long-term growth and competitive returns.
The team believes that the development of insights is valuable to the investment process, and guiding principles combined with intellectual and process flexibility are critical to strong decision-making in pursuit of attractive investments.
Culture |
|
The investment team’s culture is shaped by four core values that are cultivated and reinforced in many ways: intellectual curiosity and flexibility, perspective, self-awareness and partnership. |
Reading Network |
|
As part of the larger Counterpoint Global Team, the Global Opportunity Team has access to a reading network that includes more than 100 investor and non-investor participants at Morgan Stanley. This allows the team to leverage the distributed knowledge of the firm and encourages cross-disciplinary thinking. Each week the team circulates articles, essays and thought pieces from a wide range of sources outside mainstream Wall Street in order to help enhance its knowledge and inform investment decisions. |
Distinguishing Characteristics |
|
– Our incentives foster long-term alignment with clients. – Our disruptive change research helps find big ideas for portfolios. – Our core values of intellectual curiosity, perspective, selfawareness and partnership promote a sustainable and repeatable investment process. – Our investment philosophy is simple: Warren Buffett investment principles applied to growing companies6. |
| 1 | Idea generation |
|
Comes from screening, contact networks, value chain analysis, disruptive change research and our extensive reading. |
|
| 2 | Quality Assessment |
|
When we formulate our investment thesis on the quality of a company, we ask three key questions to determine the sustainability of competitive advantage and how it can be monetized through growth: - Is the company a disruptor or is it insulated from disruptive change? - Does the company demonstrate financial strength with high returns on invested capital, high margins, strong cash conversion, low capital intensity and low leverage? - Are there environmental or social externalities not borne by the company, or governance and accounting risks that may alter the investment thesis? |
|
| 3 | Valuation |
|
Focuses on the ratio of price to value derived from the key value drivers pricing, units, margin and multiple that determine the present value of free cash flow generation over a five-year time horizon. |
|
| 4 | Risk Management |
|
We define risk in absolute terms: risk is losing money. We believe that idiosyncratic risk can be reduced by addressing what matters at the company level. We manage valuation risk by not paying a price that exceeds value. We manage sustainability risk by analyzing the threat of disruption, financial strength and ESG externalities. We manage fundamental risk of deteriorating competitive advantage and growth opportunities. Portfolio risks are mitigated by reducing correlated factor exposures with the support of monthly reports from portfolio attribution and risk teams. |
|
| 5 | Portfolio Construction |
|
We buy when the quality is high and the price is below value. We weight the portfolio based on low price to value, high certainty of value drivers and low correlation between ideas.
The result of our bottom-up investment process is a benchmark agnostic, highly differentiated portfolio concentrated in our highest conviction ideas.
|
