Introduction to Liontrust - Flipbook - Page 3
S U S TA I N A B L E I N VES TM ENT
Sustainable Equity
Peter Michaelis, Simon Clements and Neil
Brown are the lead managers of a team
of experienced investment professionals.
The team have worked together for more
than 10 years and have been managing
sustainable investments for over 17 years.
Their process starts with a thematic
approach in identifying the key structural
growth trends that will shape the
global economy of the future, such as
technological and medical advancements,
and then invests in well run companies
whose products and operations capitalise
on these transformative changes, have
a positive impact and, therefore, may
benefit financially. Companies identified
by the process exhibit three characteristics:
excellent management and core products
or services that are making a positive
contribution to society; strong growth
prospects; and a business model that
enables them to grow profitably from these
trends and generate competitive returns.
social and governance (ESG) relating to
an investment decision.
Key to the process is the fact that every
team member is responsible for all
aspects of financial and environmental,
FIXED INCOME
Global Fixed Income
David Roberts, Phil Milburn and Donald
Phillips, who all joined Liontrust in early
2018, have more than 60 years of joint
investment experience.
The fund managers believe fixed income
markets are inefficient and there are
myriad ways of adding value to investors’
portfolios. The inefficiencies are caused
by many market protagonists who are
not price sensitive, ranging from the
macroeconomic
distortions
caused
by central banks to the idiosyncratic
scenarios when companies need to raise
debt finance and price accordingly. The
Liontrust Global Fixed Income investment
process is designed to take advantage
of these inefficiencies through a thorough
understanding of the economic environment
and detailed bottom up stock analysis.
The process uses the same framework to
garner a thorough understanding of the
economic environment and for bottom up
stock analysis: fundamentals, valuations
and technicals (FVT). These three factors
are examined regardless of whether the
managers are considering a duration
position or an investment in a speculative
grade rated company. In judging whether
a company is an attractive long-term
investment, the managers analyse the
following factors: Protections (operational
and contractual, such as structure and
covenants); Risks (credit, business and
market); Interest cover (leverage and other
key ratios); Sustainability (of cash flows
and environmental, social and governance
factors); Motivations (of management and
shareholders).
to the successes and failures of popular
investment styles like growth and value. The
team seeks to achieve idiosyncratic alpha
through: collaborative idea generation
and each member of the team having
research responsibility for an industry sector
or structural economic trends; conviction,
with each stock in a portfolio having a
meaningful weighting and being retained
for the long term; and having three silos of
stocks to provide low correlation with each
other and to mitigate against the transitory
fortunes of investment styles. The philosophy
and process is implemented through a
four-step workflow: stock idea generation,
stock selection, portfolio construction and
continual monitoring.
E QU I T I ES
Global Equity
Led by Robin Geffen (right), who is
the architect of the investment process,
supported by James Dowey (left), the team
manages a range of actively managed
global, regional and emerging markets
funds. The team has an average of 12
years’ investment experience between them.
The Liontrust Global Equity team believes that
the key to replicable long-term investment
outperformance is generating ‘idiosyncratic
alpha’: returns that are independent of
market returns and largely uncorrelated
