Our philosophy, ‘Sustainable Quality’ is embodied around two investment pillars:

Quality, which we believe advocates for a deep understanding of the company in which one intends to invest. This provides the required comfort needed for one to adopt a long-term view in their decision-making. There are few short-cuts and our process involves a review of all public information, including financial reports, management engagement, media and all areas of stakeholder information available (e.g., suppliers, customers, regulatory bodies, etc.).

For us quality is developed in:

• Strong and steady cash generation,
• Robust balance sheets
• Attractive growth opportunities in high-growth sectors,
• And a consistently high ROIC.

While there are many factors that contribute to defining “quality,” for us, these four indicators describe a cycle of cash generation within a company’s operations. This cycle involves reinvesting the generated cash into high-growth sectors, which leads to even more cash generation along with the ongoing pursuit of high-growth investment opportunities. As a result, investors can expect to see a rising return on their invested capital (ROIC).

ESG Integration forms the groundwork which underpins our Quality approach. When we integrate the ESG framework into our research, we are seeking out management teams that understand the linkages in the likelihood, severity and timeframe in which an event might impact their industry, and how they might turn that into an opportunity or navigate the turbulence. Our membership and affiliation with the IFRS Sustainability Alliance, allows us to research and analyze only the most financially material sustainability factors for each industry. In our analysis, the investment research teams are able to evaluate the type and nature of the most material factors that face their apportioned industries, across the full value chain.

This level of understanding serves as a critical element in evaluating other materially relevant impacts and levers in a company’s operations and strategy, and adds an important layer of understanding into our fundamental research. The IFRS Sustainability Alliance is the global membership programme tailored for investors. It provides a foundational basis for sustainability standards, offering curated insights and educational programming on the integration of sustainability factors into investment processes, reporting best practices, sustainability standards development, global policy and offers a library of ongoing academic research.