Another word for conservatism when it comes to sharemarket investing is ‘Quality’. Our attention is given to a deep understanding of the underlying risk of the companies we invest in through a detailed analysis of business model, balance sheet strength and the track-record of management. A strong competitive advantage must be evident, there must be low/maintainable debt levels, healthy cashflow and the proven ability of company executives to deliver earnings growth.
Net return focused & tax aware
While the gross return on assets often steals attention, it is the net return that investors actually consume. Net return is what’s left after all fees, expenses, taxes and inflation – the money families have for accomplishing goals. For Investment Partners as with clients, net return is the focus.
As a privately owned and independent company we pledge to invest according to our investment requirements without exception. Stringent mandates are in place to ensure continual compliance with our criteria and best practice. The Investment Partners Investment Committee regularly convenes to discuss portfolio weights and re-adjust in line with our methodology.
The Investment Partners portfolio construction process does not reference any index when making investment decisions. Instead, portfolios are constructed purely on the merits of each individual company. Our investment team is able to act in the best interests of clients as they are not required to mimic weights in any benchmark index.
Widespread research confirms the long term outperformance of value-investing in the sharemarket (best typified by the more famous case studies e.g. Warren Buffett, Benjamin Graham). We follow a disciplined value approach incorporating key criteria such as high and consistent dividend yield, attractive earnings multiples and realisable assets.
Researching and critically identifying rewarding long term investments is where our passion lies and the bulk of our energy is focused. We start with the ‘nuts and bolts’, stripping down each company to its bare essentials, and apply pressure tests to see if the business model will stand up to various market scenarios.
A long-term approach is needed to balance the importance of compound capital and income growth as well as the inevitability for short and medium term market volatility. A long term perspective is also required to allow higher growth companies to make progress, deliver share price catalysts and ultimately realise forecast increases in earnings. Investment Partners prides itself on pinpointing sectors or niche markets where companies have a distinct operating advantage and a higher probability for long-term outperformance.