The team have managed this strategy since 2016 and recently took on the management of the UK strategy. Value investing has gone through a difficult period, especially over the last couple of years, and many questions are being asked as to whether it can come back. The team believe they have a different approach to other strategies in the market.
1. Markets extrapolate both good and bad news; investors rely on processed information rather than obtaining it from the source, and therefore overreact
2. Investor behavioural biases can create investment opportunities that have positively skewed payoffs
3. Pragmatism and nimbleness are important: exploitable opportunities arise in different parts of the market over time
4. Their long term, contrarian stance, independent thinking, and deep fundamental research leads them to uncover mispriced attractive businesses
5. They can exploit inefficiencies by investing in sustainable businesses with potential for earnings recovery or rerating, trading at a significant discount to their estimate of intrinsic value
They believe strongly in the quote from James Grant, “successful investing is about having other people agree with you….later”, and use the example of Next, which investors are now waking up to….read more