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Altrinsic
Investment Style: Value (Global)
Altrinsic Global Advisors (Altrinsic) is located in Stamford, Connecticut, and is 100.0 percent employee-owned and managed by its staff. Altrinsic was established in April 2000 by Chief Investment Officer John Hock.
Altrinsic is an active, value-oriented global equities manager. The firm believes that its focus on understanding both returns and profitability, as well as being highly-disciplined in purchasing undervalued securities, results in outperformance with lower risk and volatility compared to value peers. Altrinsic is an aggressive value manager with a mid- to small- cap bias.
Altrinsic has a three-step investment process which centres on ideas generation, fundamental company and industry analysis, and portfolio construction.
Ideas generation is a mix of long-term quantitative screens that identify undervaluation, as well as gathering company ideas from qualitative industry research (part of step two). Fundamental research consists of understanding the economic drivers of a company through the analysis of 10-plus years of historical accounting information, understanding the business drivers of returns through different business cycles, accounting validation of statements, analysis of industry structure, and assessment of management capabilities.
Altrinsic also determines both internal and exogenous risk factors for the company. The fund manager then determines a valuation on the basis of discounted cashflow analysis, multiples analysis (share price relative to normalised earnings power), and private market and asset valuation analysis. The sector analysts then rank ideas within their industries, and present these to the team for debate. Portfolio construction combines the 60-100 most attractive companies on the basis of valuation and risk-adjusted return profile.
Altrinsic has a small team of dedicated analysts led by three senior portfolio managers who also have research responsibilities. The head of the investment team and the Altrinsic business is Chief Investment Officer John Hock, also the firm's founder and the main architect of its process.
Axiom
Investment Style: Growth (Global)
Axiom International Investors (Axiom) is located in Greenwich, Connecticut, and is 100.0 percent employee-owned and managed by its staff. Axiom was established in September 1998 by Managing Director and Chief Investment Officer Andrew Jacobson.
Axiom is an active, growth-oriented global equities fund manager. The firm believes that the single most important determinant of a company's share price performance relative to the performance of comparable alternative investments is whether the company is able to demonstrate better than generally anticipated progress in its key business drivers. These are defined broadly to include a wide variety of factors that could have a significant impact on the short- and long-term financial performance of the enterprise.
Axiom is an aggressive growth manager with a mid- to small-cap bias. The firm typically has exposure to emerging markets, so that its preferred benchmark is the MSCI All Countries World Index.
Axiom's investment process involves three key steps: screening, key business driver analysis, and portfolio construction.
The fund manager first screens the universe of approximately 5,000 stocks for three factors: a minimum market-cap of US$250.0 million, coverage by three or more sellside brokerage analysts, and liquidity of over US$1.0 million each day.
For each security, analysts identify and track key fundamental drivers that could have a significant impact on the company's short- and long-term financial performance, broadly-defined as company-specific, industry, secular trends, macroeconomic, and country.
Analysts then attempt to identify in advance the likelihood that a company will meet, exceed, or underperform the level of earnings expected by the consensus. Like primary market researchers, analysts seek and find information and data not traditionally sourced by the average market participant to form opinions.
Analysts then assign companies ratings from A to E on the basis of the company and industry's competitive position (where A is a well-established company in a well-established industry, and E is an emerging company in an emerging industry). A company is also assigned a dynamism rating based on the likelihood of exceeding, matching, or underperforming earnings guidance. A stock's portfolio weight is determined subjectively, but consideration is given to the combination of the two ratings and its relative risk/return payoff.
Axiom has two key investment personnel for global portfolios (Chief Investment Officer Andrew Jacobson and global shares portfolio manager Bradley Amoils), and a team of analysts based in Greenwich, Connecticut.
Bernstein
Investment Style: Value (Global)
Bernstein Investment Research and Management (Bernstein) is based in New York and is a unit of AllianceBernstein LP, part of one of the largest global asset management groups. Ultimate majority ownership is held by AXA.
Bernstein's investment approach is value-based and research-driven. The firm believes that investors focus too heavily on near-term economic, industry, or company-specific events which create distortions between Bernstein's intrinsic valuation of a stock and its market price. Stocks vulnerable to short-term concerns can often become under-priced in relation to their long-term earnings power and dividend-paying capability. The firm has a value bias, and in most strategies, also a small- to mid-cap bias. Bernstein is willing to back its judgement and its tracking error is generally expected to be high.
Bernstein's investment process focuses predominantly on bottom-up fundamental analysis, although this is combined with quantitative techniques. The investment process essentially has four main steps: quantitative screening, fundamental analysis, portfolio construction, and trading.
For developed markets, quantitative screening reduces the universe from around 2,700 to 1,100 companies that have the most attractive value attributes. Inputs to the screening model include factors such as price/earnings, price/book, return on equity, and price momentum. Fundamental analysis then focuses primarily on the 1,100 screened stocks.
Analysts dissect corporate financial statements and company reports and also visit company management. They then build detailed models of historical and projected balance sheet and income statement information to estimate normalised earnings power, cashflow, and asset values for each of the next five years. Portfolio construction is conducted by the Global Equity Investment Policy Group, a team of senior Bernstein investment professionals.
Bernstein has a large team of both fundamental and quantitative analysts. The key individuals for global portfolios are Sharon Fay (CIO - Global Equities), Henry D'Auria (Co-CIO EAFE Equities and CIO Emerging Markets Equities), and Kevin Simms (Co-CIO EAFE Equities and Director of Global Equity Research).
Marathon
Investment Style: Value (Global)
Marathon Asset Management LLP (Marathon) is located in London and is 100.0 percent employee-owned and managed by its staff. Marathon was founded in 1986 by its three Investment Directors Bill Arah, Jeremy Hosking, and Neil Ostrer, who own the majority of equity.
Marathon is an active, bottom-up, qualitative manager with a largely contrarian approach. The main tenet of the investment philosophy is that profitability, as defined by return on assets, is inversely related to levels of competition. Marathon looks for qualitative factors (such as competitive environment and barriers to entry) that support improved returns by a business rather than being heavily-driven by detailed quantitative modelling. Portfolios are expected to have both a value and a mid-small cap bias.
Marathon’s investment strategy focuses on qualitative considerations. The investment team screens the investible universe using its own qualitative judgements. Each Investment Director and analyst analyses the competitive and capital environment of industries using their own individual methods and approaches.
Marathon typically seeks to invest in industries where competition is declining, and looks to buy the strongest (rather than the cheapest) company in an industry poised to gain permanent market share. Marathon also seeks to invest in industries with very high barriers to entry (particularly capital requirements), although acknowledges that there are few well-priced stocks with these characteristics. Country allocation is a small component of the process. The main objective is to identify countries with positive government influence and strong investor sentiment.
Each of Marathon's three Investment Directors is responsible for constructing a regional portfolio (Bill Arah - Japan and parts of South-East Asia; Jeremy Hosking - US and parts of South-East Asia; and Neil Ostrer - Europe), with the support of at least one analyst (including some assigned a small portion of the assets by their Investment Director). The regional portfolios are then aggregated on the basis of regional weights set by Jeremy Hosking, who has ultimate responsibility for the global shares product.
Marathon has a small team of dedicated analysts, led by the three Investment Directors (Bill Arah, Jeremy Hosking, and Neil Ostrer). Investment staff are located in London, but specialise by region.
Sands Capital
Investment Style: Growth (US)
Sands Capital Management (Sands Capital) is an Arlington, Virginia-based fund manager 100.0 percent employee-owned and managed by its staff, which focuses solely on US large-cap growth investing. Frank Sands Snr and William Johnson (now retired) founded the firm in 1992.
Sands Capital is a bottom-up, large-cap, deep growth fund manager concentrating on high-quality companies. The firm's investment objective is to invest in companies with the long-term potential to outperform the broader market significantly.
The firm believes that company research encompasses three main elements: data and information-gathering, long- and short-term earnings estimates, and ongoing qualitative assessment of the substance of the long-term business prospects of existing and potential investments and their valuations. It is Sands Capital's opinion that the first two elements have been commodified and provide little if any research advantage. The firm's main area of focus is therefore the third element, where Sands Capital believes it can add value.
Sands Capital's investment process comprises three main steps: ideas generation, fundamental research, and portfolio construction. The investment team draws on numerous sources for initial data and investment ideas. This primary research enables the team to understand growth industries and companies from the perspective of a partner or co-owner, which Sands Capital believes is the essence of successful long-term investing.
The fund manager has six key investment criteria. The first three are that a company must have above-average earnings growth, significant competitive advantages/a unique business franchise, and a leadership position in a promising business space. The others are that the company must possess a clear mission and value-added focus, financial strength, and a reasonable valuation relative to the market.
Sands Capital then constructs a portfolio of up to 30 leading companies that evolves gradually. The house is largely a 'buy and hold' investor, and allows the companies in the portfolio to capture long-term business opportunities that lead to wealth creation. The manager will typically sell a stock if it becomes overvalued, the business matures, there is an adverse change in long-term fundamentals, or the reality differs from the initial analysis.
Sands Capital is led by Frank Sands Jnr as Chief Executive Officer and Chief Investment Officer. Frank Sands Snr has stepped back to a role within the analyst team.