We have a standard investment philosophy which is long term, total return driven. The process is bottom up and our primary valuation methodology is a discounted cash flow.
We determine an intrinsic value for each stock, based on a required rate of return for each stock, a 10-year (or five-year) cash flow and the sustainable earnings growth for that stock. This is compared to the current stock price and a relative value is calculated. The portfolio is then constructed based on a combination of what the relative value is and what the benchmark weighting is.
Although the portfolio is constructed based on a bottom-up process, the portfolio manager will also look at top-down allocations (sector and regional), to ensure that we manage concentration risk on a geographic and sectoral level.
Due to the diversity of the geographical and sectoral diversity which the listed real estate universe offers, we can construct a portfolio that is able to take advantage of economic and sector growth opportunities.
We aim to deliver 2-3% alpha per annum in USD.