Investment Process

Equity
Our primary goal is to generate risk-adjusted returns for our clients in excess of those earned by the broader stock market. We achieve this through both capital appreciation and income from stocks of companies that offer value to shareholders. Dividend yield is important in our selection of stocks but it does not limit our investment choices.

Our strength in investment selection begins with our analytical approach to the drivers of the world economy. A close examination of global supply and demand trends identifies industries and companies that are well positioned to benefit from positive market dynamics. Our detailed screening process targets companies with strong balance sheets, healthy earnings, and focused management.

After determining that a company is efficiently managed and fundamentally sound based on our fundamental research model, the selection process continues in search of industry leaders. A company should have a sustainable competitive advantage that will separate it from its competitors and provide it with the opportunity to maximize its potential.

Once an industry leader is identified, an appropriate price for the company must be determined. The returns of the company and its risk profile are examined and a fair value is estimated. Investments are made if the market price of the stock is under our appraisal of fair value or if we believe that value-adding catalysts are probable. An investment in a company that is at or above fair value is avoided. While a company’s growth profile may be desirable, the market must afford us the opportunity to participate at a reasonable price in order to limit risk.

We have found that this disciplined process is the best method for generating returns that outperform the market while protecting capital. It allows for a focused investment in the strongest companies with the brightest prospects and the least amount of relative risk.

Fixed Income
Our strategic aim is to select securities that exhibit relative value at the market, sector, and issuer level while favorably positioning accounts for any interest rate environment. We take into account our clients’ income needs, horizon, and taxability. Thinking primarily in terms of after-tax yield, we look at fixed income asset classes’ relative positions on the yield curve as well as velocities of all points on the curve. We seek undervalued sectors within the most desirable asset class. When we arrive at the issuer-level, we look for issues at the most favorable position in the debt retirement calendar. We also capitalize on mispriced issues, or ‘outliers,’ and opportunities arising from all types of corporate actions. Once a security has passed our stringent risk criteria and we set the price, our team begins the global-reaching negotiation that we require to transmit value to our clients.