Core to our investment philosophy is the belief that, to deliver optimal investment solutions, we must begin by maximising the opportunity set available to us. The ability to generate returns, in our view, is a function of three factors:
- fund managers’ skill and capability
- the amount of risk, or relative risk, behind that skill or capability
- the size of the opportunity set.
The wider the opportunity set or investment universe, the more scope there is to demonstrate skill. By contrast, the narrower and more constrained the investment universe, the less room and flexibility there is for fund managers to demonstrate their skill.
We therefore structure our research of the entire investment universe around four key components to identify, in advance, a manager’s ability to outperform in the future: Philosophy, Process, People and Performance. Managers must meet or exceed expectations in all four areas to be considered for selection. This framework helps ensure our process is both disciplined and consistent.
Read on to learn about the four key components of our research process.