Competitive Advantage

The strategy aims to provide investors with a differentiated, idiosyncratic source of returns, largely independent of the prevailing macroeconomic environment. The process has been tried and tested through incredibly volatile times since launch. The team focus on constructive engagement on corporate transformation, taking advantage of the liquidity and flexibility afforded by public markets.

Investment Philosophy & Process

The process begins with a traditional value mindset, looking for quality companies that are on cheap valuations relative to their history and are enduring a difficult time. From here, there needs to be an acknowledgement from senior management that a strategic change is required to unlock value for all stakeholders. This is often coupled by a reshuffle at the higher echelons of the firm, followed by a deleveraging of the balance sheet and a stricter discipline surrounding capital allocation. The team constructively engage with their portfolio companies throughout the journey and remain patient as the business transforms and the stock re-rates from value to growth. All companies are expected to pay dividend on a one- year prospective basis.

Competitive Advantage

Due to the firm’s approach of limiting capacity in order to protect investment philosophy, it allows the team to span the market cap range. This allows the team to focus on finding the best opportunities for both income and capital growth from the largest of FTSE 100 names, right the way down to the small-caps.

Investment Philosophy & Process

The team’s approach to investing is underpinned and driven by dividends. Every stock must yield more than the FTSE All-Share Index on a prospective basis, with most sales driven by this criteria. As such it often leads the team to names that fall outside of the typical ‘bond-proxies’ owned by many equity income managers.

The team puts a clear focus on valuation, in particular, normalised earnings, balance sheets (i.e. limited leverage), asset value support and free cash flow. Management change and actions are assessed as possible routes to a re-rating.

The team employs a high conviction approach, and is comfortable running significant sector overweights or even complete voids.

Competitive Advantage

The fund management team is stable and vastly experienced. A process that has been proven and delivered through many market cycles. A high conviction, all-cap growth strategy that aims to finds material value across the market cap spectrum, averaging nearly 2 take-outs a year since inception.

Investment Philosophy & Process

The team look for assets that are priced for their history, not their future – stocks that others might avoid or fail to see the growth opportunity. These companies have a strong purpose and disciplined capital allocation. A highly differentiated portfolio of esoteric names that the team believe are incorrectly priced and have the balance sheets to fund their growth. The strategy has a high active share, and typically holds 50-60 names, with no sector constraints and a maximum active position of around 3.5%.

Competitive Advantage

Michael and Rachel run an extremely concentrated portfolio of 20-40 names, which allows the team to understand their stocks at a level of granularity which many other UK fund managers simply do not have the capacity to provide. The emphasis that the team places on capital preservation means the fund tends to outperform, often markedly, during large macro drawdowns, providing a very differentiated return profile to many other UK active equity funds.

Investment Philosophy & Process

The investment process has three core tenets: thematic growth, capital preservation, and sustainability. Michael and Rachel look for high quality growth stocks that will be beneficiaries of long term thematic tailwinds. The team employ rigorous risk and valuation controls with portfolio companies typically exhibiting low leverage, strong balance sheets, proven business models, stable and predictable cashflows, stable earnings growth, and stable sales growth. The fund operates with a purposeful team-led engagement approach to sustainability, looking to help companies improve their impact on the environment and society.

Competitive Advantage

The JOHCM Global Opportunities strategy aims to deliver absolute returns with below average volatility and strong downside protection over the medium term.

Investment Team

Senior Fund Managers, Ben Leyland and Robert Lancastle co-manage the JOHCM Global Opportunities strategy. They are supported by a dedicated global analyst, Jasmeet Munday.

Investment Philosophy & Process

Ben and Robert believe the equity market consistently underestimates the value created by well-managed companies reinvesting cash flow internally at high rates of return to drive growth over the medium term.

They seek to generate high risk-adjusted returns by continuing to focus on high quality, cashflow generative companies with strong balance sheets that sit in the ‘forgotten middle’ between the styles of value and growth. The team believes that these companiess that are capable of producing compounding growth over the long term, and invest in strong and sustainable business models irrespective of sector.

Competitive Advantage

- A distinct investment approach that targets stocks, sectors and countries at the sweet spot in their life cycle

- A ruthless sell discipline – the managers sell when a stock’s fundamentals or technicals deteriorate, or when there is contagion from deteriorating fundamentals or technicals in its sector or country.

- Two-thirds of their performance is expected to come from bottom-up stock selection, one-third from top-down asset allocation (sector, country, currency). They exploit multiple anomalies and inefficiencies from a range of sources and are not dependent on a single style or investment technique.

Investment Team

The strategy is managed by Senior Fund Managers Christopher Lees, and Nudgem Richyal. Chris and Nudgem are solely responsible for portfolio construction, but draw upon the collective wisdom of the other experienced investment professionals in J O Hambro’s regional investment teams and share their ideas.

Investment Philosophy & Process

At the heart of the Global Select philosophy is the idea that stock markets are inefficient. The fund managers aim to exploit market anomalies via an investment process that combines both top-down and bottom-up research. They have a distinct “4-Dimensional” investment process (stocks, sectors, countries, time/change) that focuses on the behaviour of each share price to determine whether the most important driver of each prospective investment is stock specific, sector or country-based.

Competitive Advantage

- A distinct investment approach that targets stocks, sectors and countries at the sweet spot in their life cycle.

- A ruthless sell discipline – the managers sell when a stock’s fundamentals or technicals deteriorate, or when there is contagion from deteriorating fundamentals or technicals in its sector or country.

- Two-thirds of their performance is expected to come from bottom-up stock selection, one-third from top-down asset allocation (sector, country, currency). They exploit multiple anomalies and inefficiencies from a range of sources and are not dependent on a single style or investment technique.

Investment Team

The strategy is managed by Senior Fund Managers Christopher Lees, and Nudgem Richyal. Chris and Nudgem are solely responsible for portfolio construction, but draw upon the collective wisdom of the other experienced investment professionals in JOHCM's regional investment teams and share their ideas.

Investment Philosophy & Process

At the heart of the International Select philosophy is the idea that stock markets are inefficient. The fund managers aim to exploit market anomalies via an investment process that combines both top-down and bottom-up research. They have a distinct “4-Dimensional” investment process (stocks, sectors, countries, time/change) that focuses on the behaviour of each share price to determine whether the most important driver of each prospective investment is stock specific, sector or country-based.

Competitive Advantage

- Very experienced team with a well-established investment approach and a long history of working together.

- Performance – consistent long-term outperformance of portfolios managed by the fund managerPMs during the past > 25 years through various cycles.

- Dual growth philosophy – dual philosophy of classic and recovery growth, allowing outperformance in up markets and providing downside protection in down markets.

- Process – robust and repeatable investment process

Investment Team

The strategy is managed by a Lead Senior Fund Manager Emery Brewer and a Senior Fund Manager Ivo Kovachev who together launched the strategy in 2010. Senior Fund Manager Stephen Lew joined in 2013. Before joining J O Hambro, Emery founded the Driehaus Capital Management Emerging Markets Growth Fund which he managed for 10 years until he left Driehaus in December 2007. The fund was ranked by Lipper as the number one fund in Emerging Markets Fund category for this period. In 1998, he founded the Driehaus International Discovery Fund which he co-managed Ivo Kovachev until April 2005 and which was ranked as number one fund by Morningstar in the International Funds category for the three-year period of 1999-2001.

Emery and Ivo are supported by dedicated analysts, Ladislav Sabo, who joined in July 2016 and Dalibor Kovac who joined August 2017.

Investment Philosophy & Process

Emery and Ivo follow a principally bottom-up, stock selection driven process that seeks to identify the most dynamic growth stocks within their investment universe. By making extensive use of screening tools and closely tracking corporate news flow, they aim to identify companies demonstrating strong and improving operational performance. They will look to find companies that have the potential to develop world class products or become industry leaders in local markets. In addition to strong fundamentals, the team considers market timeliness, as well as individual and relative valuations.

Competitive Advantage

The team believes that the combination of an assertively top-down, country-driven approach to assessing and selecting stocks is a significant differentiating factor from many of their peer group. Combining this process with the team’s considerable experience in investing in the emerging markets will maximise portfolio exposure to country-level opportunities such as macro-economic and political improvements.

Investment Team

James Syme, (Senior Fund Manager) and Paul Wimborne (Senior Fund Manager) joined J O Hambro to launch the JOHCM Global Emerging Markets Opportunities strategy in June 2011 and were joined by Ada Chan as an analyst in 2011, before she was promoted to be a fund manager in 2022. This strategy uses the same investment philosophy, style and process that the team used to great effect at their previous employer, Baring Asset Management (Barings).

James and Paul joined Barings in November 2006 and together managed the firm’s Global Emerging Market strategy until December 2010. During this time, the strategy delivered strong performance against both the benchmark and their peers, ranking in the upper quartile of competitor universes (source: eVestment Alliance as at 31 December 2010).

Investment Philosophy & Process

For James and Paul identifying the right countries in which to invest is the most important influence on investment performance. Through an extensive process that focuses on growth, liquidity, currency, management/politics and valuations, they produce country allocation targets for each of the 21 countries within the index. Complementing their top-down view is a stock selection process that focuses on identifying quality growth stocks within their favoured countries. The result is a large-cap biased portfolio of typically 50-60 stocks.

Investment Team

Paul Wild (Senior Fund Manager) is the key decision maker for the JOHCM Continental European strategy. He is supported by a dedicated Analyst, Justin MacGregor, who joined Paul in August 2021. The 30+ investment professionals at J O Hambro represent a further source of ideas.

Investment Philosophy & Process

The strategy has a core style and is actively managed, targeting strong but consistent outperformance.

- Paul Wild has a pragmatic approach to investing, seeking opportunities in both growth and value sectors

- His investment edge centres on the ability to interpret information that can be overlooked by the market.

- Paul uses a blend of top-down views and bottom-up stock selection to add value. From a top-down perspective, he focuses on sector and industry allocations as well as themes, market cap and beta exposure.

- Paul then decides which individual companies fit within that view. Paul aims to generate alpha at market turning points when pure bottom-up strategies do not perform well.

Competitive Advantage

The team manages the strategy with a highly selective, valuation orientated investment style. They aim to find contrarian investments that combine attractive valuations and a high return on capital. Absolute, not relative - valuation is the key to selecting investments. They focus on the stocks in their portfolio rather than worrying about stocks in the broader market that he does not own. This approach is reflected in the constituents of the portfolio where low return on capital employed sectors such as financials, oil and utilities are underweighted, in favour of more defensive industries such as consumer staples.

Investment Team

Robrecht Wouters, Senior Fund Manager, is the lead manager ofs the European Values Select strategy. He joined J O Hambro in September 2003 and became lead portfolio manager on the strategy in 2008. He was joined in 2015 by Luis Fananas, who is a Fund Manager supporting the day to day running of the strategy.

Investment Philosophy & Process

The strategy combines a contrarian, valuation-based approach and a focus on high return on capital. The team have a highly selective bottom-up, valuation orientated investment style, which focuses on undervalued companies with high return on capital employed. The strategy employs an unconstrained, high alpha approach and expects to generate significant outperformance.

The team believes that investing in companies trading at a discount (at least greater than 25%) to their ‘intrinsic value’ will yield above average investment returns. The inefficiencies they aim to exploit centre on market time horizons. Other investors may have a shorter-term focus that leads to them selling stocks when they miss a single earnings estimate. By the same token, markets can fall in love with a stock and as a result miss perceptible weakening in its business. Most investors do not price compounding effectively. They focus on quality companies with high return on capital creates a good opportunity to exploit this anomaly. The team takes positions in out-of-favour stocks based on detailed proprietary research and his past experience. His valuation- based approach strongly encourages taking contrarian views.

Investment Team

The current Asia ex Japan team has been responsible for the product since inception of the strategy at J O Hambro in September 2011. Samir Mehta (Senior Fund Manager) and Cho-Yu Kooi (Senior Fund Manager) joined J O Hambro in May 2011.

Samir manages JOHCM’s Asia ex Japan (All cap) strategy and Cho-Yu is the lead fund manager responsible for the Asia ex Japan Small and Mid-Cap (SMID) strategy.

Investment Philosophy & Process

The team’s investment philosophy is based on the following beliefs:

- Value creation in a company is driven by long-term growth and the ability to generate returns above its cost of capital. The team therefore focuses on companies displaying long-term, sustainable, quality growth characteristics.

- There are pricing inefficiencies in Asian stock markets. The greatest inefficiencies are at the individual stock level. This is, therefore, where they focus their investment resources, with approximately 70% of total value added expected to come from fundamental stock selection.

Detailed analysis and regular interaction with company management is vital. The team’s analysis gives them the conviction to take a long-term investment view, meaning that turnover is low.

- Asian markets are frequently driven by macroeconomic and political factors that are separate from stock-specific considerations. These markets have a history of giving high returns but also with high volatility. The team aims to blend their growth stock focus with cyclical exposure that is valuation-driven and based on top-down views. They may also use downside protection strategies in adverse market conditions. Approximately 30% of value added is expected to come from top-down views.

The team manages concentrated portfolios with a high conviction, benchmark-agnostic style. They have never owned some of the mega cap names listed in Asia that more benchmark-aware strategies may be drawn to for risk control purposes and by virtue of their index weighting. They aim to own companies that will become future members of the major indices.

Investment Team

The Asia ex Japan team has been responsible for the product since inception of the strategy at J O Hambro. Cho-Yu Kooi (Senior Fund Manager) and Samir Mehta (Senior Fund Manager) joined J O Hambro in May 2011. Cho-Yu is the lead fund manager responsible for the Asia ex Japan Small and Mid-Cap (SMID) strategy and Samir manages JOHCM’s Asia ex Japan strategy.

Investment Philosophy & Process

The team’s investment philosophy is based on the following beliefs:

- Value creation in a company is driven by long-term growth and the ability to generate returns above its cost of capital. The team therefore focuses on companies displaying long-term, sustainable, quality growth characteristics.

- There are pricing inefficiencies in Asian stock markets. The greatest inefficiencies are at the individual stock level. This is, therefore, where they focus their investment resources, with approximately 70% of total value added expected to come from fundamental stock selection.

Detailed analysis and regular interaction with company management is vital. The team’s analysis gives them the conviction to take a long-term investment view, meaning that turnover is low.

- Asian markets are frequently driven by macroeconomic and political factors that are separate from stock-specific considerations. These markets have a history of giving high returns but also with high volatility. The team aims to blend their growth stock focus with cyclical exposure that is valuation-driven and based on top-down views. They may also use downside protection strategies in adverse market conditions. Approximately 30% of value added is expected to come from top-down views.

The team manages concentrated portfolios with a high conviction, benchmark-agnostic style. They have never owned some of the mega cap names listed in Asia that more benchmark-aware strategies may be drawn to for risk control purposes and by virtue of their index weighting. They aim to own companies that will become future members of the major indices.

Competitive Advantage

Part of what makes the strategy unique is the team's flat structure with regards to how they make investment decisions. Each person brings their unique background and skill set to the team, therefore everyone is seen as equal with respect to their view and contribution to the investment process. All members of the team contribute to the research effort for every idea that makes its way through the investment process and into the portfolio. Additionally, if needed, the investment team is able to draw on the specialist knowledge of the Regnan Centre or their network of external specialist contacts at any stage of the process, both in terms of in-depth research into particular solutions and broader themes. 

Investment Philosophy & Process

The team’s investment philosophy is built on the belief that innovative companies on a mission to solve the challenges increasingly faced by our environment and society are well-positioned for growth in the future, particularly where this need for a solution remains largely unmet; ultimately, these underserved societal and environmental needs represent demand for a product or service that is scarcely available. Companies that are able to fulfil these needs should therefore be rewarded with revenue growth, as the size of the market into which they sell their core products grows, and this is particularly true if their solution uses a degree of technological ingenuity or a differentiated approach. The team’s belief, based on practical experience, is that innovation follows a repeatable pattern that can be identified early with a process designed to capture it. 

Competitive Advantage

The combination of both water and waste themes is a truly differentiated and unique proposition and one that has been pioneered by the investment team. Given the unique thematic and sustainable approach, the portfolio is concentrated and highly differentiated from other global portfolios and benchmarks. The team does not target a particular factor and tends to construct a truly diversified portfolio with no significant style biases.  

That being said, the team expects a consistent positive tilt towards ‘earnings visibility’ to be one of the consistent features of the portfolio given the underlying characteristics of water and waste management companies. 

Investment Philosophy & Process

The team believes that there is no economy without water and no sustainable economy without waste management. The world must improve its management of water resources and physical waste if it is to grow sustainably and enable future generations to meet their own needs. Sustainable water management practices will bring opportunity for companies operating throughout the water value chain. The team also expects the waste management market to continue to expand as societal, environmental and economic pressures, and innovation bring continued investment opportunities.  

While the secular theme of water and waste is powerful, companies naturally exhibit cyclicality by virtue of the end markets they are exposed to, as well as geographies and regions where they have a presence. The team tries to minimise those risks in their strategy with deep, fundamental and sustainable research.

Competitive Advantage

Part of what makes the strategy unique is the team's flat structure with regards to how they make investment decisions. Each person brings their unique background and skill set to the team, therefore everyone is seen as equal with respect to their view and contribution to the investment process. All members of the team contribute to the research effort for every idea that makes its way through the investment process and into the portfolio. Additionally, if needed, the investment team is able to draw on the specialist knowledge of the Regnan Centre or their network of external specialist contacts at any stage of the process, both in terms of in-depth research into particular solutions and broader themes. 

Investment Team

Part of what makes the strategy unique is the team's flat structure with regards to how they make investment decisions. Each person brings their unique background and skill set to the team, therefore everyone is seen as equal with respect to their view and contribution to the investment process. All members of the team contribute to the research effort for every idea that makes its way through the investment process and into the portfolio. Additionally, if needed, the investment team is able to draw on the specialist knowledge of the Regnan Centre or their network of external specialist contacts at any stage of the process, both in terms of in-depth research into particular solutions and broader themes.