Hello, it's Zehrid Osmani, Head of Global Long-Term Unconstrained Equities at Martin Currie, and Portfolio Manager of the European Long-Term Unconstrained funds. We manage high conviction best ideas funds of 20 to 30 stocks. We have a continental European Fund and a pan-European Fund, depending on investor interest.
Our approach across these Funds is very similar, the investment philosophy is the same. We have three important pillars that distinguish our investment philosophy. Firstly, we are long-term unconstrained and by long-term we mean 5 to 10 years’ time horizon. By unconstrained, we mean focusing on best ideas, without worrying about index exposure. Why should we put our clients’ money in some parts of the index that we don’t think will generate value for shareholders in the long-term? Instead we focus on finding the 20 to 30 best ideas that we harness for our client’s benefit.
We typically buy sustainable quality growth companies, and the way we find those companies is with fundamental research that we do systematically. And as part of that systematic approach, a very structured approach to assessing risks across industry, company, ESG and portfolio risks that these companies would bring to the portfolios.
The aim is to look into the future rather than look backwards into the rear view mirror, and that ensures that we pick the best ideas for our shareholders.
ESG is integral to our fundamental research. Our team that does the fundamental research also does the ESG analysis. We have a strong expertise in ESG at Martin Currie, developed over more than 10 years. We have recently won the top rating of triple A+ by the PRI for the 4th year in a row, which highlights the extent of our expertise.
We have put in place a proprietary ESG framework to analyse all the companies that we invest in. We have over 50 parameters on governance and sustainability and by which we assess the ESG risk elements of companies that we invest in.
The typical type of companies that we buy operate in industries with high barriers to entry, and tend to have dominant market positions, they have strong pricing power, low disruption risk, they offer attractive structural growth prospects, they generate high return on invested capital, offer strong compounding cashflows, and have solid balance sheets, they also have good quality management and a good governance and sustainability, and above all they have attractive valuation.
We have a structured framework as part of our analytical approach to analysing companies. It’s based on three mega trends that we analyse to ensure that we capture the best opportunities for the long-term. The aim is to look into the future rather than look backwards into the rear view mirror, and that ensures that we pick the best ideas for our shareholders. We have three megatrends which are, demographic change, future of technology and resource scarcity, and within that there are various themes we assess each stock by to ensure that we capture all the most attractive opportunities out there.
Culture is important in our team, we are inclusive, candid, focused on learning and improving, but above all we have a passion to deliver the best outcome for our shareholders through this approach of finding the 20 to 30 best ideas in the market and delivering them in a portfolio that is high conviction, concentrated yet diversified at the same time.
Thank you for listening, it's Zehrid Osmani, Portfolio Manager of the European Long-Term Unconstrained funds at Martin Currie.
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