Investment Philosophy

We invest in best-of-breed businesses for their quality, strategic competitive edge and value. We believe that a portfolio of businesses each containing these elements will provide us with a favourable return over time.


Sustainable organic

  • Invest for organic growth
  • Frequent use of products
  • Resilience through recessions
  • Market share growth
  • Infinite potential
  • Wary of corporate actions

Quality management

  • Standing of CEO, Chairman, CFO, Board
  • Record of consistent success
  • Business strategy
  • Business culture (energy, innovation, openness, honesty & integrity, ESG focus, etc.)
  • Success with execution
  • Shareholder orientation
  • Clear communication
  • Active voting


  • Operating margin, development
  • Return on Invested Capital (and incremental ROIC)
  • Balance sheet strength
  • Reinvestment record and potential
  • Working capital management

Free cash
flow generation

  • Sustainable free cash flow generation (not cash-hungry business)
  • Cash conversion ratio (and trend)
  • Success of free cash flow allocation
  • Sustainable dividend growth
  • Success of buy-backs

Investment Process: Identifying businesses which meet our quality criteria

"We are what we repeatedly do. Excellence then, is not an act, but a habit."
Will Durant


  • Quantitative fundamental quality metrics
  • Qualitative analyst research
  • Portfolio manager research
  • Third party research

Portfolio Manager

  • Research co-ordination
  • Macro and market research
  • Technical analysis for tactical cash allocation
  • Implementation


  • Best ideas
  • Attractive valuation
  • Sensible diversification


  • Ongoing analysis
  • Valuation
  • Performance
  • News Flow
  • Results
  • Corporate events


  • Long term intention
  • Better overall alternatives
  • Market or business overvalued
  • Strategic case changes


The specialist equity management division was established in 2009, and the team has over 100 years of combined experience.

The team only invests in best-of-breed companies that can clearly demonstrate quality, strategic competitive edge and value.

The team looks for companies with the following characteristics:
To identify businesses that meet the quality threshold, the team use the above criteria to narrow down the broad investment universe of over 2000 candidates to a core universe of 150 candidates, which are then monitored closely.

  • Good growth potential and the ability to deliver sustainable top-line growth
  • Management of the highest quality
  • Leaders in their field
  • Strong balance sheets
  • High returns on capital employed
  • Strong internal cash flow
  • Ability to grow dividends annually under all economic circumstances
  • An impressive performance record
  • Shareholder friendly
  • A sustainable compounder

In addition to the above criteria, there are a series of key characteristics a company should possess in order to be considered for investment. Characteristics such as an positive margin trend, levels of debt and dividend cover are also central to the team’s analysis.

*All sources as at 30 June 2018

Our Equity Management Team

"We believe that - if we have identified a quality business, and we do not pay more than a fair value, then these businesses should provide favourable returns over time. Central to this philosophy is a ‘buy-to-hold and compounding’ mind-set, to be invested in those businesses for the longer term.”
Gerrit Smit, Fund Manager

Thomas Withington

Thomas is a Senior Associate within the Equity Management team, providing client-servicing support to Gerrit Smit, Head of the Equity Management team.

Thomas joined the Group in 2011, having previously worked as a Project Manager at Jabulani Rural Health Foundation. Prior to this, he worked as a Consultant at IQuad Group Limited in Cape Town, consulting on various government-initiated investment incentive programmes. Thomas holds a Bachelor of Business Science (Honours) degree from the University of Cape Town and is a CFA charterholder.


Sean Harper

Sean is responsible for company research, supporting the Equity Management team.

Sean joined the group in 2018, having previously worked at Quilter Cheviot and Old Mutual Global Investors. Sean has passed Level III of the CFA program, he holds the Investment Management Certificate (IMC), and he is an affiliate member of the Chartered Institute for Securities and Investment. He graduated with a first-class degree in BSc (Honours) Finance and Investment Banking.


Gerrit Smit

Gerrit is Head of the Equity Management team, he has overall responsibility for the business unit, along with its Portfolio Management and Equity Research functions.

Gerrit joined the Group in 2008 following over 25 years’ investment experience as Equity Analyst, Chief Investment Strategist and Chief Investment Officer for Sanlam’s International portfolios in London, and heading a boutique fund manager’s investment research. He holds a Hons B.Com from the University of Stellenbosch and the University of South Africa and a PSM qualification from the Business School of the University of Stellenbosch.


Tom Jeffcoate

Tom is a Director of Stonehage Fleming Investment Management and responsible for company research within the Equity Management team. Specialising in in-depth, bottom up research, he covers multiple companies across all sectors under the single global quality equity mandate.

Tom joined the Group in 2009 from ZAN Partners where he was a multi-asset Analyst and Trader. Prior to that he worked as an Equity Analyst at Sigma Capital having started his career with PricewaterhouseCoopers’ Performance Improvement Consulting business. Tom is a CFA charterholder and an associate of the Chartered Institute for Securities and Investment.


Mark Sloan

Mark is a Director within the Stonehage Fleming Group specialising in in-depth, bottom up company research within the Direct Equity Management team.

Prior to joining Stonehage Fleming, Mark spent over 9 years at Investec Asset Management where he was a Global Equity Analyst and Sector Portfolio Manager. Previously, he worked at M&G Investments in both Pan-European and global equity analyst roles. Mark is a CFA Charterholder and graduated from Warwick University with a first class honours degree in economics.


Nicky Muirhead

Nicky is responsible for company research within the Equity Management team. Specialising in in-depth, bottom up research, she covers multiple companies across all sectors under the single global quality equity mandate.

Nicky joined the Equity Management Team in 2019 from Bessemer Trust having previously worked at River & Mercantile Asset Management, Neptune and BlackRock/MLIM. She is a CFA charterholder and graduated from Oxford University with first class honours in Physics.


Stonehage Fleming At A Glance

With a history dating from 1873

The largest international Family Office in the EMEA region

Independently owned

80% of the business is employee owned

An investment business

with nearly GBP9.2bn under management for individuals, families, charities and institutional-calibre clients

Investment centre

located in London employing over 85 people

Employing over 500 people

in 11 offices across 8 geographies

Proprietary expertise

in Global Equity, Multi-Asset, Fixed Income and Private Equity


Our flagship investment capability is the Stonehage Fleming Global Best Ideas Equity strategy, which was launched in July 2009. The strategy has in excess of GBP1.5bn in assets under management. It is offered through a Dublin based UCITS fund (the Stonehage Fleming Global Best Ideas Equity Fund, launched in August 2013) or on a segregated basis for portfolios of GBP10m and over.


Fund Name NAV Price NAV Price
Valuation Date
Stonehage Fleming Global Best Ideas Equity Fund 182.8323 183.5144 09 Dec 19
Stonehage Fleming Global Best Ideas Equity Fund 188.5724 189.2681 09 Dec 19
Stonehage Fleming Global Best Ideas Equity Fund 216.212 217.8216 09 Dec 19
Stonehage Fleming Global Best Ideas Equity Fund 217.7312 219.3432 09 Dec 19
Stonehage Fleming Global Best Ideas Equity Fund 159.2158 159.7999 09 Dec 19
Stonehage Fleming Global Best Ideas Equity Fund 167.71 168.9481 09 Dec 19
Stonehage Fleming Global Best Ideas Equity Fund 150.7217 151.2684 09 Dec 19
Stonehage Fleming Global Best Ideas Equity Fund 165.7961 167.0133 09 Dec 19
Stonehage Fleming Global Best Ideas Equity Fund 139.1872 139.9599 09 Dec 19




World equity markets trod water over the third quarter. The MSCI World Index (including Emerging Markets and dividends) held onto the first half performance of +16.2% (US$ terms) over the nine months.



World equity markets continued their positive trajectory during the second quarter. The MSCI World Index (including Emerging Markets and dividends) appreciated by a further +3.6% on top of the high base of +12.2% during the first quarter. This brought the first half performance to +16.2% (all data in US$ terms).



The new year started off with a strong first quarter. The MSCI World Index (including Emerging Markets and dividends) appreciated by +12.2% (in US$ terms). This is the best first quarter return for over twenty years.

25th November

11th November

28 October 2019


“Integrity is the essence of everything successful.” - R Buckminster Fuller

The Institute of Supply Management PMI Indices provide valuable information on US economic activity. Read More.

2 September 2019

“Do the difficult things while they are easy and do the great things while they are small.” Laozi

The most important strategic issue for world capital markets remains the strength of the US economy. The following information can shed some light on this subject.

18 August 2019

“The noblest pleasure is the joy of understanding.” Leonardo da Vinci

The US yield curve has made it to our front-page for the first time. Angst around trade tariffs and negative news on the German economy triggered the first inversion of the 2Y/10Y curve in the current economic cycle for a few short moments last Wednesday but featured in many headlines.

29 July 2019

“The truth is more important than the facts.” Frank Lloyd Wright

Rolling annual GDP growth remains at the long-term average despite the second quarter moderation. Contrary to the run-up to previous recessions, the quarterly growth numbers are currently less volatile. This is rather constructive towards capital market stability.

1 July 219

“Too often we enjoy the comfort of opinion without the discomfort of thought.” John F. Kennedy

The leading index’s growth continues at the previous month’s constructive level of +2.5% (on its long-term average). Against this, the growth in the current activity index in the chart continues its moderating trend. Importantly, the spread between the two series (the bottom section in the above chart) continues in positive territory. This spread has historically provided a very early warning against recession risks, but currently seems far from doing so. US – Spread Between Nominal GDP and Treasury Yield

17 June 2019

​“You will be much more in control, if you realise how much you are not in control.” Benjamin Graham

The Activity Index is still growing at a healthy +1.7%, but we can clearly expect GDP growth to moderate going forward. The major question is obviously how vulnerable the economy may be. On this note, the main US leading economic indicators continue to moderate but remain constructive.

27 MAY 2019

“Life can only be understood backwards; but it must be lived forwards.” Søren Kierkegaard

We follow various US sentiment indices to better understand the outlook for economic activity. These indices do not reflect real economic data, but are useful to consider ‘the economic mood of the nation’.

13 MAY 2019

“Whether you think you can, or you think you can’t, you are right.” Henry Ford

With the strong US economy consumption still makes up 69.4% of their GDP. Along with the comfort of continuing relatively constructive leading economic indicators, we also focus on the stability of consumer confidence.

29 APRIL 2019

“Things are never clear until it’s too late.” Peter Lynch

Average consensus expectations of +2.1% GDP growth were handsomely exceeded at +3.2%. This brought the annual growth to +3.2%, the highest level since 2015. Growth in international trade and building inventory accelerated, making up half of the overall growth. Consumption growth slowed to a still respectable +1.9%. Overall nominal GDP is now a fifth larger than its peak before the Great Recession (with compounded growth of +1.8% p.a.).

15 APRIL 2019

“The essence of portfolio management is the management of risks, not the management of returns.” Benjamin Graham

Whilst the growth in the leading economic index has moderated to +3.0%, it is still indicating a constructive environment. Along with this, the current economic activity index’s most recent reading picked up to +2.4%. Further, the spread between the two series (the bottom section in the chart) remains in positive territory and therefore provides comfort to equity investors.

1 APRIL 2019

“Only the mediocre are always at their best” Jean Giraudoux

Equity markets have been spooked a few times in the recent past by fears for potentially sharper rising inflation levels in the US. These fears are mainly based on high employment and rising wages.

18 MARCH 209

“The stock market is designed to transfer money from the active to the patient” Warren Buffett

The combination of the Conference Board’s index of ten leading economic indicators and industrial production serve as a solid barometer of the health of the US economy.

4 MARCH 2019

“It’s not the mountain that we conquer but ourselves” Sir Edmund Percival Hillary

We often start our note with a chart of a leading economic indicator to understand the risk of an imminent recession in the US.

11 FEBRUARY 2019

“The aim of the wise is not to secure pleasure, but to avoid pain” Aristotle

Even though industrial production makes up less than a fifth of the US economy, its higher volatility causes disproportional sensitivity in capital markets.

28 JANUARY 2019

“The more I live, the more I regret how little I know” Claude Monet

We monitor several indices reflecting general capital market conditions. Each one considers the sponsor’s perceptions of the capital market environment, including stresses in the financial system.

14 JANUARY 2019

“He who can no longer pause to wonder and stand rapt in awe, is as good as dead.” Albert Einstein

Investors start a new calendar year with a theme of global moderation in the economic outlook following the very volatile markets at the close of last year. The big question is whether the market discounts the outlook deteriorating more aggressively than earlier perceptions.

US confidence indices are starting to roll over from elevated levels. It is still too early to confirm a negative trend, but odds seem high to be the case. This has historically started years before a recession, and we can on this basis therefore not yet forecast an imminent recession.

17 DECEMBER 2018

“He who in contented is rich.” Laozi

With the volatile US stock market, it is prudent to continue closely monitoring its economic fundamental outlook as this year closes.

The current economic indicator in the above chart remains stable. The most recent reading of the trusted leading economic index of ten economic indicators has dropped from the previous peak level but is still at an elevated level. The spread between the two series (see the bottom section of the chart) is also at an elevated level. This spread traditionally went negative more than two years before the respective recessions.

19 NOVEMBER 2018

“It’s not that I am so smart, I just stay with problems longer.” Albert Einstein

It is our impression that we would need a relatively high probability of an imminent US recession to fear the formation of a bear market in equities and therefore a structural peak in share prices.

29 OCTOBER 2018

“If you can’t explain it simply, you don’t understand it well enough.” Albert Einstein

The weak stock market performance over the past few weeks has brought it close to an official correction level of -10%.

Investment Management

£854m fund manager: ‘Google will be a great dividend payer one day’

Investment Management

Tech stocks poised for a comeback, says equity manager

Technology stocks, which have fallen sharply in recent weeks on heightened regulatory scrutiny and ongoing trade tensions, are poised for a recovery, according to Gerrit Smit, head of equity at international family office Stonehage Fleming.

Despite rallying 2.7% on Tuesday after US Federal Reserve chair Jerome Powell said the central bank could cut rates, the tech-heavy Nasdaq Composite remained 7.8% down from its close on May 3.

Tech stocks — including JSE-heavyweight Naspers and its Chinese associate, Tencent — have been on the back foot for weeks amid trade disputes between the US and other major economies.

Tencent has slipped 14.6% since May 3, while Naspers has declined about 9%, propped up by the weaker rand and plans to list its international internet assets in Europe. Naspers’s decline has dented the JSE, given its hefty weighting in local indices.

The tech sell-off intensified on Monday after US authorities signaled their intention to curb the size and power of sector giants.

“The anti-trust probes will affect only some businesses to some extent, and it may take very long before that happens,” said Smit. “In those cases, valuations already reflect some of those risks.”

Read full article >>

Investment Management

Should you invest in Uber?

Gerrit Smit, Head of Equity Management, believes it is worth comparing Uber’s financial fundamentals with those of some of the more established tech stocks.

Read the full Uber IPO >>

Investment Management

Stonehage Fleming’s flagship fund passes USD1 billion mark

Assets under Management (“AUM”) for the Stonehage Fleming Global Best Ideas Equity Fund (“the Fund”) have passed the USD1bn mark.

Since launching in August 2013, the USD1.03bn Fund has attracted assets from private, professional and institutional investors and has returned 66.7%* over the last five years, compared to the Global Equity peer group average of 30.0 %** and the comparative index return of 40.0%*** (US $ terms).

Fund Manager Gerrit Smit manages a concentrated, high conviction portfolio of 27 high quality businesses that are chosen for their sustainable growth potential, strong management team, strategic competitive edge and value.

Current investments include some of the world’s best-known companies such as Visa, PayPal, Alphabet, Nike, Amazon, Microsoft and Estée Lauder. Technology names now make up 25.5%**** of the Fund, a reflection of the manager’s view that the technology sector will remain a dominant feature of daily life and business in general. It also has a high health care exposure.

Gerrit Smit argues that: “The technology sectors’ contribution towards growing productivity, providing key information to businesses and individuals alike and creating new business opportunities seems to be ever increasing. Many technology businesses are currently benefiting from wide adoption, high business demand, general high profitability, strong cash flow generation and strong balance sheets. Some large technology businesses have become good growing dividend payers, which further supports capital growth. Investors can therefore also consider some of these businesses from an income perspective.”

Commenting on the current market environment, Smit adds: “The combination of stable and constructive leading US economic indicators, continuing moderate economic expansion and earnings growth, low inflation expectations, only moderate interest rate rises and fair valuations has created a proverbial ‘Goldilocks’ investment environment. This ‘dull but constructive’ environment leads to more certainty and lower economic volatility and is more attractive to more investors. Whilst expectations for the level of economic expansion have recently been tempered, the outlook for continuing earnings growth remains on course for quality businesses.”

The Fund had previously been available exclusively to clients of Stonehage Fleming, but has been open to outside investors since 2016. It is now available on eleven platforms across South Africa and the UK.

* Source: Stonehage Fleming Investment Management Ltd (SFIM), for period 1 May 2014 to 30 April 2019 (Class B).

**IA Global $, for period 1 May 2014 to 30 April 2019. Source: Financial Express.

***MSCI World All Country $ TR, for period 1 May 2014 to 30 April 2019. Source: Bloomberg, MSCI.

****Source: Stonehage Fleming Investment Management Ltd (SFIM), to 30 April 2019.

Investment Management

Fears of an imminent US recession are premature

Recently, the news has been littered with headlines about an inverted yield curve, long seen as a strong indicator of oncoming economic recession in the United States.

The headlines were prompted specifically by the inversion of the 3-month/10-year yield curve. It seems to be too early, on a fundamental basis, to have grave concerns about an imminent US recession, though.

In fact, the 3-month/10-year yield curve only inverted for a few days before returning to a positive reading.

Added to this, a 3-month yield is an unnaturally short maturity to consider in the context of a potential US recession. Historically this curve provided the market with an early warning of, on average, 22-months. That would imply a predicted recession in the first quarter of 2021, if the curve were to invert from here on a sustainable basis, which it shows no signs of doing yet. This does not raise the immediate alarm bells the financial press would have us hear.

Read full article >>

Investment Management

Animal healthcare - an opportunity for investors

‘Organic growth potential in the animal healthcare sector exceeds that of human healthcare’ says Gerrit Smit. In this article, Gerri Smit, head of Equity Management (London) at Stonehage Fleming, discusses the low risks of investing in the animal healthcare sector.

Read full article >>

Investment Management

GBI 5th Anniversary

The Stonehage Fleming Global Best Ideas Equity Fund passed the five year anniversary of its launch in August 2018. We conducted interviews with colleagues from around the business to provide an overview of the fund, the investment strategy which underpins it, and its success to date. Please note that this video is for informational and educational purposes only and is not intended to be a financial promotion or investment advice.

Investment Management

US-China trade feud is a test for your investment portfolio

Investment Management

Italy perceived as trouble — but not by all

Money managers are carefully watching the political situation in Italy unfold, deeming the country “too big to fail.”

But sources said they’re not just watching for negative investment effects from the country’s political and fiscal problems: They’re also looking for opportunities to add to positions. “Political risk is back with a vengeance in Italy,” said Emiel van den Heiligenberg, head of asset allocation at Legal & General Investment Management in London.

“As the third-largest global issuer of government bonds after the USA and Japan, Italy is too big to be allowed to fail without severe contagion to the global financial system. However, it is also too big to comfortably bail out using tried and tested mechanisms.” Recent weeks have seen Italy’s population and investors forced to reckon with a populist government coalition and a potential snap election.

Read full article >>

Investment Management

Pets: An investment case

While Smit is a bottom-up investor, which means he doesn’t invest based on macro trends, but picks companies based on fundamentals, he says healthcare is a solid industry from a sustainable organic growth perspective – one of the four pillars of his investment strategy.

Yet, he is fairly sceptical about the prospects for traditional human medicine as an investment for three reasons. The first is patent issues – as global patents expire, generic drugs come to market, competition intensifies and margins drop. Moreover, governments tend to be the largest clients worldwide and their concentrated buying power puts even more pressure on prices.

Finally, legal risks are significant – ultimately human life is involved. With animal drugs, most of these arguments disappear, Smit says.

Read full article >>

Investment Management

‘Where assets appear cheap there is a good reason for it’

ne of the driving philosophies behind Gerrit Smit’s investment approach is that it is better to pick a strong business at a fair valuation than to look for something that is cheap and hope it will recover. Patience is the name of the game.

Mr Smit, who is head of equity management at Stonehage Fleming, said: “Where assets appear to be cheap, there is a good reason for it. Very often the hope or the expectation of being able to turn it around are too optimistic. The task to turn a proverbial ship is usually larger than people perceive it to be.

“[Our] philosophy is to buy to hold outstanding quality businesses with a particular competitive edge at the maximum of a fair valuation.” Thus, an outstanding quality business does not mean that more value cannot be derived from it.

He added: “Quality businesses very often seem to be fully valued and may appear to be expensive, but in the end the better the business can continue to deliver, the more people are willing to pay for it.

Read full article >>

Investment Management

Top Fund Managers’ 5 Global Stock Picks

It’s rather unorthodox thinking, but Smit explains that the company owns all the properties, around the world, that their restaurants are run from. They then franchise the day-to-day running of them to individuals.The first point Smit makes is that no other landlord-tenant relationship can be as good as this one because one is totally dependent on the other. “The success of that restaurant is critical for everybody.”

Read full article>>

Investment Management

Fund focuses on the world’s strongest brands - and it’s paying off

No one can accuse Gerrit Smit of having doubts as a fund manager. He is someone who believes passionately in how he goes about generating profits for his investors. He is not an individual for turning.

‘I have total conviction in what I am doing.’ he says. ‘I am investing of sustainable growth and everything in the fund’s portfolio is held on that basis. It lies at the core of what I and my team do as investment managers.’

Read full article via This is Money >>

Investment Management

Analyse This: Stonehage Fleming’s Gerrit Smit

Financial Mail analyse Gerrit Smit, fund manager, Stonehage Fleming.

If someone came to you tomorrow with R100m to invest in just one company, which would it be?

Accenture. The single most important issue to invest for in a business is the one of sustainable organic growth. While evolving technology will always create new opportunities for growth, Accenture is one of the few examples where their particular services in technology will always be needed to assist clients into new technological developments. While all technology may not be sustainable, Accenture’s services in technology should be. They have an outstanding record in this context thus far.

Read full article via Financial Mail>>

Investment Management

Top wealth manager returns 70pc in three years

The best performing manager in the “aggressive” category, Stonehage Fleming, returned 70pc to investors in three years. It managed this through its £500m Global Best Ideas fund.

You don’t need to be a client to invest as the fund is available via some investment shops at a charge of 1pc a year. Gerrit Smit of Stonehage Fleming said the portfolio contained only 25 stocks, with top performers including Visa, Accenture, the consultancy, and McDonald’s . “McDonald’s is a fantastic property business,” he said. “The chain receives a franchising fee and also owns the physical properties, so gets rental income too. It has been able to increase its dividend every year for 20 years.”

See more:

How to Invest

For more information on how to invest in the Stonehage Fleming Global Best Ideas Equity Fund, click on the link below.

Find out more about how to invest

Our Partners

The Stonehage Fleming Global Best Ideas Equity Fund is available for investment via the below platforms:





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