Unlocking Value: A Business Owner's Approach to Global Equity Investment

The Foundation of Our Investment Philosophy: Deep Dive into Business Fundamentals

Our investment strategy is rooted in a fundamental, business-owner's perspective. We meticulously analyze the underlying economics of target companies and rigorously assess the capabilities and integrity of their management teams. This rigorous due diligence ensures that each investment aligns with our core principles of value and sustainability.

Portfolio Construction: Diversification and Measured Allocation

Typically, our portfolio comprises 25 to 40 companies, strategically diversified across various industries to mitigate risk. When a new company is integrated into the portfolio, its initial allocation is carefully set between 2% and 4% of the total assets, reflecting a balanced approach to capital deployment.

Insightful Portfolio Adjustments: Adidas AG and DBS Group

A recent significant addition to the portfolio was adidas AG. This decision was driven by the company's successful strategic transformation, a consistent trajectory of high-single-digit organic sales growth, and a marked improvement in profit margins. Furthermore, adidas's commitment to capital returns and an attractive valuation relative to its anticipated high incremental return on invested capital made it a compelling investment. Conversely, DBS Group was divested from the portfolio. Despite its robust franchise and exemplary management, the company's valuation multiple had expanded considerably, leading us to seek more appealing opportunities elsewhere.

Core Investment Criteria: Targeting Quality and Value

Our investment selection process prioritizes businesses demonstrating strong recurring revenue streams and a high return on invested capital (ROIC). We also place immense importance on the quality of management. These criteria are strictly applied, but only when coupled with low absolute and relative valuations, thereby ensuring a disciplined entry point for our investments. This dual focus on intrinsic quality and attractive pricing is central to our long-term value creation strategy.

Future Outlook: Seizing Opportunities in a Dynamic Market

We remain committed to our methodical, value-driven approach as we navigate the complexities of global markets. By continuously evaluating business fundamentals, management quality, and market valuations, we aim to uncover compelling investment opportunities that align with our clients' long-term financial objectives. Our adaptive strategy allows us to capitalize on market inefficiencies while maintaining a diversified and resilient portfolio