Institutional Investors
Our Approach
You made a promise to your constituents — we can help you keep it.
We believe owning companies that create positive economic value (i.e., Return on Invested Capital > Weighted Average Cost of Capital) is a primary driver in earning excess returns over a market cycle. It is perhaps the best means of helping clients meet their actuarial rates of return in a risk-controlled manner.
We focus on
- Companies that have characteristics that may lead to the potential to generate excess return.
- Owning companies that sustainably generate economic value whose underlying values are not fully appreciated by the investment community.
The Quality Advantage - Economic Value Added
We demonstrate that quality works and how it works – this is our competitive difference. We believe the most important measure of quality is the Economic Value Added (EVA)* that companies create. EVA is the difference between operating profits and charges to the capital required to create profits – a measure of profitability.
We have found that positive EVA margin companies outperform negative EVA margin companies across both short-term and long-term time periods. We include this metric in our proprietary investment process to help us identify and invest in those companies that have the potential to create value for investors.
*ISS EVA Investor Express