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Investment Approach

Foord is a fundamental earnings house that takes long-term views and patiently waits for prices to follow earnings. We do not trade on market sentiment. We are confidently different from our peers and take sizable off-benchmark positions in businesses that offer asymmetric risk-reward to protect investor capital and deliver a safe investment yield. We construct diversified investment portfolios based on rigorous fundamental research, high conviction ideas and an adaptable, value-driven investment policy.

Multiple counsellor

Foord’s global investment team is characterised by considerable experience.  Many of the senior investment professionals have spent significant time at Foord.

Ideas are drawn from the entire investment team as part of Foord’s multiple-counsellor process. In conventional fund management, a single fund manager typically takes full responsibility for the management of a portfolio. In contrast, the multiple-counsellor approach involves dividing the assets of each portfolio among a number of portfolio managers. These managers then make independent investment decisions and manage their portions as though they were separate funds, but with full transparency. While the Foord hierarchy is flat and highly collegial, accountability for multiple-counsellor returns is squarely on each portfolio manager.

The emphasis on individual decision making within a team environment is premised on our belief that, for the most part, individuals produce better results than teams: Committees tend to dilute investment ability because the right decision is unlikely to meet with consensus approval. Individual authority and accountability results in swift decisions, keeping distance between the seed of a good investment idea and its implementation as short as possible.

Philosophy & Process

Explore the diagram to learn more

Investor mandate Relative ranking Research Strategy Macro economics Diversification Benchmark agnostic Long-term view Valuation sensitive Big calls investor

philosophy

Achieve superior long-term returns by focusing on long-term earnings (over the long-term, stock prices will follow earnings); we take a truly long-term view, we are patient, we buy at the right price. The tenets of our investment philosophy are the lights that guide
what we do.

process

Rigour and intuition are combined in a fluid and continuous process that brings structure and flexibility to portfolio management.

investor

Investors and their portfolios are at the centre of our operations.

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ESG ETHOS

Foord has a well-established Environmental, Social and Governance (ESG) and investment stewardship ethos. This ethos is founded on the belief that investors’ money should be managed with the same degree of care and dedication they would themselves exercise in the endeavour. 

 

Foord considers ESG factors to be integral to the research and portfolio management process. They are essential to active shareholding. Because the long-term sustainability of income streams has always been fundamental to our investment philosophy, we have an acute awareness of non-financial factors embedded in the investment process.

 

While the implementation of our ESG philosophy does not specifically prohibit investment in any given sector or industry, it plays an instrumental role in shaping our view of the long-term sustainability and longevity of businesses.

Voting Policy

Foord invests on behalf of segregated and collective investment scheme portfolios in companies listed on approved stock exchanges. It owes a fiduciary duty to its investors to vote on company resolutions in a manner that preserves and enhances the investor’s investment interest. Corporate abuses are more probable in an environment of shareholder apathy. Shareholders must actively participate in protecting the value of their investments against potentially harmful management decisions.

Guiding principles include:

  • Do not abstain unless for strategic or tactical reasons. Foord takes its stewardship responsibilities very seriously. We apply our minds to every resolution put to shareholders.
  • Vote against resolutions that dilute the interests of shareholders. Examples include placing shares under the blanket control of directors, authorising loans and financial assistance to directors, associate companies or subsidiaries and blanket authority to issue shares.
  • Vote against share option remuneration models. Share option schemes offer inherent risk-reward asymmetry and dilute existing shareholders. We favour the alignment created between management and shareholders when management buys shares in the market for cash. Foord’s management remuneration philosophy therefore supports cash awards to good managers that achieve performance metrics that enhance long-term shareholder value.
  • Scrutinise director appointments closely. We pay special attention to the election and re-election of directors. Appointees must be appropriately qualified and experienced for the company’s industry. Track records must show the highest ethical and governance standards. We apply strict criteria to the election of independent directors and chairpersons.
  • The proper composition and size of boards and board subcommittees.
  • Auditor rotations in line with corporate governance best practice.

Voting policy document is available here.

We used to think we managed money or investments. Managing risk is what we actually do. As we have come to realise the importance of risk, we spend more time managing it.

- Dave Foord, Chief Investment Officer

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