Investment process

Exclusion criteria

    Environmental damage

    • \The one hundred biggest carbon emitters
    • \Fossil fuel extraction
    • \Polluting transport

    Human rights abuse

    • \Modern day slavery practices
    • \Child labour practices
    • \Activities that involve illegal employment
    • \Activities that support armed conflict

    Tax evasion

    • \Tax havens (black and grey listed countries*)
    • \Tax evasion committed by companies
    • \Company headquarters based in fiscal paradises

    * Fiji, Guam, Panama, Caimans Islands, Sainte Lucia, Liechtenstein, Jersey, Guernesey, Bermuda etc…

    Quantitative analysis

    • \We search for those companies which have a return on invested capital in excess of the cost of capital. We also search for those companies that are on the verge of earning a return on invested capital above the cost of capital in a sustainable manner.
    • \Growing dividends over time.
    • \Peers comparisons.

    Company valuation tools

    The investment managers seek undervalued companies offering attractive risk return profiles :

    • \Discounted cash flow models
    • \Justified valuation multiples (ex. price/earnings)
    • \Consensus expectations from "sell-side" analysts and rating agencies

    Technical analysis

    Trend analysis with the aim of finding optimal timing to invest or sell a security :

    • \Weekly moving average
    • \Volatility and depth study
    • \Technical indicators (Relative Strength Index, Moving Average Convergence Divergence ...)

    Independent rating tools

    Numerous ESG rating agencies* periodically publish data on companies across the world.
    We have observed that only 68% of ESG information is updated on a consistent basis.

    *Bloomberg, Robecco Sam, Sustainalytics, Arabesque, MSCI, ISS, CDP, S&P Global.

    The current big differences in ESG ratings among rating agencies creates an obstacle for standardised benchmarks today.

    This imperfect environment therefore supports active investment management. But over time we do expect a harmonisation of ESG rating procedures.

    In response to the lack of homogenous ESG ratings, we have implemented our own sustainibility evaluation process.

    • \The environment holds a 50% weighting within the overall score
    • \Social values hold a 30% weighting
    • \Governance holds a 20% weighting

    Short list

    After applying the above criteria, the investment managers draw up a list of securities for the watch list, which holds numerous potentially attractive investments.

    Investment in the SRI fund

    The investment managers select a concentrated number of high conviction stocks drawn from the “short list”.

    The securities are selected according to a “bottom / up” approach, both from a geographic and sector standpoint.