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

Quality management

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


  • Operating margin development
  • Working capital management
  • Return on invested capital
  • Success of historic reinvestments

Free cash
flow generation

  • Sustainable free cashflow generation (not cash-hungry business)
  • Trend in cash conversion ratio
  • Success of free cashflow allocation
  • Success of buy-backs
  • Sustainable dividend growth

Investment Process: Identifying businesses which meet our quality criteria

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


  • 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 125 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 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.


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 167.6806 169.5166 23 May 19
Stonehage Fleming Global Best Ideas Equity Fund 172.4717 174.3578 23 May 19
Stonehage Fleming Global Best Ideas Equity Fund 205.9007 208.3197 23 May 19
Stonehage Fleming Global Best Ideas Equity Fund 206.7802 209.2067 23 May 19
Stonehage Fleming Global Best Ideas Equity Fund 145.4223 147.0116 23 May 19
Stonehage Fleming Global Best Ideas Equity Fund 159.0567 160.9221 23 May 19
Stonehage Fleming Global Best Ideas Equity Fund 137.2874 138.7859 23 May 19
Stonehage Fleming Global Best Ideas Equity Fund 156.8114 158.6483 23 May 19
Stonehage Fleming Global Best Ideas Equity Fund 126.384 127.7202 23 May 19




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.



Calendar year 2018 turned out to be the most volatile year since the Credit Crisis. The MSCI World Index (including Emerging Markets and dividends) lost -9.4% over the year (in US$ terms). Whilst the Dollar has been a strong currency, the overall result was negative in all major currencies.



Gerrit Smit, Head of Equity Management reviews the last quarter, sharing his insight on the global equities market.

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%.

1 OCTOBER 2018

“What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience.” Adam Smith

We continue to believe that the most important fundamental issue for the health of global financial markets is the outlook for the US economy.


GLOBAL MARKETS: The most important issue for the global capital markets remains the health of the US economy.

27 AUGUST 2018

“Tomorrow belongs to those who can hear it coming.” David Bowie

Somewhat surprisingly the end of July reading for the leading economic indicator ticked up again. Whilst the PMI index dropped a notch, it is still at elevated levels. The combination of these two readings provides continued confidence in the US economy.

13 AUGUST 2018

“Difficulties strengthen the mind, as labour does the body.” Seneca

US ECONOMY: We keep monitoring US economic indicators to form an opinion of the level of risk for an upcoming recession, and therefore for a potential peak in share prices: US – Conference Board Leading Economic Index & Goldman Sachs Current Economic Activity Indictor vs S&P 500

23 JULY 2018

“He who is brave is free.” Seneca

Most leading US economic indicators are currently at historically elevated levels, with some seemingly in a process of peaking and rolling over. Headlines of ‘this is as good as it gets’ may well be expected.

18 JUNE 2018

Investors are reflecting on a combination of potent recent geopolitical events. The G7 summit ended in acrimony, the Singapore summit seems to hold promise of more peace in Asia and immediately afterwards more threats of a trade war between the US and China materialised.

These are confusing circumstances for decision making, but fortunately investors are better guided by economic fundamental indicators. To read more please click to download

28TH MAY 2018

“Luck is what happens when preparation meets opportunity.” Seneca the Younger

14 MAY 2018

“There are more things that frighten us than injure us, and we suffer more in imagination than in reality.” Seneca the Younger

23 APRIL 2018

It is useful to constantly follow economic indicators to assess whether the fundamental economic outlook stays constructive.

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:

Investment Management

Stonehage Fleming’s flagship fund produces outstanding returns

“Despite some nervousness, equities remain the asset class of choice” Gerrit Smit, Head of Equity Management, Stonehage Fleming.

Since launching in August 2013, the Stonehage Fleming Global Best Ideas Equity Fund has returned 47.2%*, compared to MSCI World All Countries Index of 39.0%*. The fund has attracted assets from private, professional and institutional investors and now has assets under management of over US$650 million.

Read full article via FA News

Investment Management

Interview: Gerrit Smit on why the global tech rally is far from over

Listen here to the podcast to hear Smit’s views on tech giants such as Tencent, Naspers, Microsoft, Apple, Amazon and Tesla and why he believes the tech rally of recent years still has plenty of legs. Listen here>>

In this episode of TechCentral, Duncan McLeod chats via Skype to Gerrit Smit, fund manager at London-based wealth management company Stonehage Fleming, which invests billions of dollars on behalf of ultra-high-net-worth individuals.

Thirty percent of Stonehage Fleming’s Global Best Ideas (GBI) Fund is made up of investments in the technology space, including in companies such as Visa, PayPal, Tencent and Accenture.

Smit, who is head of the equities management team, has overall responsibility for the business unit, along with its portfolio management and equity research functions.

He joined Stonehage Fleming in 2008 after 25 years of investment experience as equities analyst, chief investment strategist and chief investment officer for Sanlam’s international portfolios in London, and heading a boutique fund manager’s investment research.

In the podcast, Smit explains why he believes there’s still plenty of upside for some of the world’s biggest tech stocks, despite the strong rally they’ve enjoyed in recent years.

But what are the best metrics for determining whether these shares still make good investments or not? Smit explains why he focuses on top-line growth and on free cash flow, in particular.



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