Our investment vision relies on active management and conviction. For us, buying a share means taking a long-term stake in a high-quality company, at a price below its intrinsic value. Each opportunity is rigorously analysed, valued and may be selected according to our own methodology and proven principles. Our portfolios are diversified but concentrated on our strongest convictions, irrespective of the indices and passing trends.
Our fund managers look for companies that have a tangible competitive advantage, are highly profitable and generate substantial cash flow surpluses. Companies with these attributes should be able to create long-term value for their shareholders.
The principles of Business-Like Investing (BLI)
Clarity of the business model
We invest in companies that operate on a clear and transparent business model. Our focus is on companies that can develop their activities in a successful and profitable way and that can capitalize on future investment opportunities. Luc Bauler, BL Equities America Fund Manager.
Transparent balance sheet
Saying that you should only invest in what you understand may seem obvious, but it isn’t always. If you opt for active management, it is important to limit your sphere of action to areas that you know about. This helps limit the number of errors that can cause capital losses, which are difficult to recover. It also means accepting that you will not benefit from all the opportunities offered by the equity markets. Joël Reuland, BL Global 30, BL Global 50 and BL Global 75 Fund Manager.
Capital allocation refers to the use that a company makes of its financial resources. These choices include investment in organic growth, acquisitions, return of capital to shareholders and deleveraging. The company’s decisions in this respect must be assessed according to their profitability and whether undertaken in a disciplined fashion, as they condition the company's future development and the quality of its balance sheet. Ivan Bouillot, BL Equities Europe, BL European Family Businesses Fund Manager.
Competitive advantage is a company’s ultimate differentiating factor. It determines whether a company is in a strong enough position to be a ‘price maker’ or if it bears the brunt of competition as a ‘price taker’. A competitive advantage can derive from a strong brand, patent, cutting-edge technology or captive client.Marc Erpelding, BL Emerging Markets Fund Manager.
If purchased at too high a price, even good quality companies can turn out to be poor investments. Paying too much for a share limits its potential for appreciation and increases the risk of losing money. We have created a valuation model which enables us to determine a company’s intrinsic value. We only invest if the company’s share price offers a discount against this value. Steve Glod, BL Equities Japan Fund Manager.