Investment Teams

International Value Equity

 

We analyze non-U.S. companies using the same value-based approach that has been utilized in our U.S. strategies for over 25 years and in the international markets for nearly a decade. Our team has firsthand experience living and working in many international countries, affording meaningful cultural and business practice insights to the management of our strategies.

Investment Philosophy

The Advisory Research international investment philosophy follows a disciplined, bottom-up, value approach. We focus on international securities that we believe are undervalued, have minimal downside risk and have significant upside potential. We seek out investment opportunities with undervalued assets or stocks that have been abandoned by the institutional investment community.

We identify investment opportunities by performing comprehensive bottom-up analysis and due diligence, which allows us to assess company-specific risk and long-term upside potential. We then construct portfolios that are broadly diversified yet focused enough to allow for excess returns. Our general holding period is between one and three years. Our disciplined approach to value investing guides our thinking and frames our decision making through every step of the investment process. We believe our approach to investing in value securities in the international markets has the potential to create long-term value for our clients and to protect capital through market downturns.

Process

We apply our value-based philosophy through a disciplined and consistent investment process. We utilize a bottom-up, fundamental investment approach and invest in stocks that we believe are trading at a discount to net asset value and that have, in our opinion, minimal downside risk.

Bottom-up research is the foundation of our process, with a focus on balance sheet analysis. Our investment team seeks to identify companies that trade at attractive valuations relative to net asset value, with low probability of financial distress (measured in terms of low net debt/equity or net debt/EBITDA), with adequate liquidity, and that are profitable. We perform extensive quantitative financial and business analysis to determine the possible downside risk of an investment. To do so, we convert the accounting statements from “accounting” to “economic” reality. Significant time is spent revaluing both the assets and the liabilities to determine the net asset value of the company. Then, we research the company to see if it has an identifiable path to unlock and enhance value. We are focused on determining the upside of a particular company and emphasize senior management interviews, company visits and competitor analysis to do so.