We were privileged to participate recently in the London Quality Growth Investment Conference, which attracts some of the most thoughtful and discerning minds in the investment community. It was an opportunity to share our views on navigating today’s volatile market environment and to affirm our commitment to investing in quality companies that deliver sustainable long-term growth at attractive evaluations. We opened our presentation with one of our favourite cartoons by the British cartoonist Matt, whose insightful humour encapsulates an important part of our investment outlook: “Everything may be OK.” This simple yet powerful message aligns with our conviction that, despite the significant global challenges we face, human resilience, resourcefulness, and innovation will ultimately prevail.
Our optimism is not to be mistaken for complacency or a disregard for the very real challenges that lie ahead. We are deeply aware of the pressing issues confronting the global economy, from geopolitical tensions, political uncertainty and environmental crises to mounting levels of indebtedness, inflation, and the shifting landscape of interest rates. These challenges create a complex and turbulent backdrop for investors, and they are certainly not to be underestimated. Yet, we maintain our belief that navigating such adversity requires a steadfast focus on quality. Quality companies are the bedrock of resilient investment portfolios, able to thrive amid uncertainty by continually evolving, innovating, and delivering solutions at scale.
The companies we invest in are not just surviving in today’s environment—they are leading the way forward. These businesses are at the forefront of addressing many of the most critical challenges we face. They are involved in developing new technologies, optimizing processes, and creating products and services that enhance productivity and quality of life. They are finding new ways to solve problems, not create them, and are disrupting others, not getting disrupted. This is what we look for in quality companies that we seek to buy at attractive valuations so they can compound in value over the long term and generate superior returns for our investors.
This investment philosophy is not just a theory—it is a strategy that has delivered consistent and strong performance over time. Over the past decade, our portfolio has achieved a compound annual growth rate of 12%, placing us in the top 10% of comparable funds, according to the IA Global.
The Investment Insight we share this month provides more details of our analysis of the strategy’s performance characteristics over the past five years since the Covid-19 pandemic. The data highlights two important facts:
The first is that our returns over the period are attributable entirely to stock selection and not to sector allocation or other factors like style or momentum. Our performance has been driven by our ability to identify and invest in exceptional companies that have sustainable competitive advantages, strong managements with a track record of value creation and robust balance sheets.
The second is that our fundamental bottom-up approach to stock selection and our rigorous qualitative and quantitative analysis lead us to invest in stocks that are broadly diversified, with stocks in digital transformation, consumer, healthcare and industrials all contributing to returns at different times. You can read our Investment Insight by clicking on this link or on the attachment.
As we navigate the challenges ahead, our belief that “everything may be OK” is not a dismissal of the real risks and uncertainties we face, but rather a recognition of the resilience and resourcefulness inherent in quality businesses and, indeed, in humanity itself.
History has shown time and again that periods of economic turmoil and uncertainty have given rise to transformative innovations and remarkable achievements. We believe that this time will be no different. The companies in our portfolio are well-positioned to take advantage of new opportunities and continue to grow, supported by the strength, sustainability and resilience of their business.
This conviction guides our investment decisions and reinforces our confidence that, by focusing on quality, we can continue to deliver strong, sustainable returns for our investors over the long term.