We are long-term investors focusing on a small number of high-quality companies. We choose these using a bottom-up approach, and any investment only comes after a rigorous evaluation of a company with respect to three pillars of quality: its management, franchise and financials.
Despite our focus on quality, we know that no company (or investor!) is perfect and so we seek to build long-term respectful relationships with company management and boards that allow us to learn and improve together.
This approach – or engagement – also means we are better positioned to identify when the original investment case begins to falter. In these cases, we believe it’s our responsibility as part owners to do what we can to improve the situation and thereby strengthen the long-term prospects of the business – and protect our clients’ capital.
The long-term nature of our investment approach is particularly well suited to this type of engagement. It gives us time to build relationships with management teams, to earn their respect as well as the right to have these conversations. We’ve found that developing mutual trust is one of the keys to influencing corporate policy.
Issues we might approach companies about are many and various. It could be anything from a controversial ingredient in one of the company’s products, to determining the true carbon impact of their operations, the diversity of board representation or an unexpected change in the company’s debt profile.
We engage with companies in face-to-face meetings, via emails or letters, or on the phone. We then report to clients on our progress in our quarterly reports and engagement reviews.