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.

  • BOTTOM-UP INVESTOR
  • THINK LIKE A BUSINESSMAN BUYING ANOTHER BUSINESS
  • CONSIDER RISK AS MUCH AS RETURN
  • INVEST FOR SUSTAINABLE ORGANIC GROWTH IN QUALITY BUSINESSES
  • BUY GLOBAL BUSINESSES, EXPOSED TO EMERGING MARKETS
  • OPERATE WITH HIGH CONVICTION
  • NO BENCHMARK ORIENTATION
  • OVERVALUED BUSINESS REPLACED WITH A MORE ATTRACTIVE OVERALL PROPOSITION

FUNDAMENTAL PILLARS OF QUALITY: IDENTIFYING GLOBAL BEST-OF-BREED BUSINESSES

SUSTAINABLE ORGANIC GROWTH

  • 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

EFFICIENCY

  • 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

FILTERING

  • 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

PORTFOLIO CONSTRUCTION

  • Best ideas
  • Attractive valuation
  • Sensible diversification

ANALYST COVERAGE & RECOMMENDATION

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

SELL DISCIPLINE

  • 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 31 December 2019

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

Gerrit Smit

Partner - Head of Equity Management

Tom Jeffcoate

Director - Equity Management

Mark Sloan

Director - Equity Management

Nicky Muirhead

Director - Equity Management

Thomas Withington

Director - Equity Management

Sean Harper

Associate - Equity Management

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.

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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.

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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.

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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.

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Thomas Withington

Thomas is a Director 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.

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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.

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Stonehage Fleming At A Glance

WITH A HISTORY DATING FROM 1873

The largest international Family Office in the EMEA region

INDEPENDENTLY OWNED

c.50% of the business is employee owned

AN INVESTMENT BUSINESS

with nearly GBP10.9bn under management for individuals, families, charities and institutional-calibre clients

INVESTMENT CENTRE

located in London employing over 85 people

EMPLOYING OVER 570 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 GBP2bn 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 in exceptional cases for portfolios in excess of GBP20m.

 

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Fund Name NAV Price NAV Price
(prev)		 Valuation Date
Stonehage Fleming Global Best Ideas Equity Fund 205.3322 205.0435 09 Jul 20
Stonehage Fleming Global Best Ideas Equity Fund 212.396 212.0945 09 Jul 20
Stonehage Fleming Global Best Ideas Equity Fund 253.2038 253.2795 09 Jul 20
Stonehage Fleming Global Best Ideas Equity Fund 255.429 255.502 09 Jul 20
Stonehage Fleming Global Best Ideas Equity Fund 179.5918 179.3356 09 Jul 20
Stonehage Fleming Global Best Ideas Equity Fund 196.5985 196.6533 09 Jul 20
Stonehage Fleming Global Best Ideas Equity Fund 170.5062 170.2607 09 Jul 20
Stonehage Fleming Global Best Ideas Equity Fund 194.0506 194.102 09 Jul 20
Stonehage Fleming Global Best Ideas Equity Fund 153.6622 152.9835 09 Jul 20

Equity Updates

 

GLOBAL EQUITIES QUARTERLY LETTER Q1 2020

World equity markets were hit by the unexpected global COVID-19 pandemic. The MSCI World Index (including Emerging Markets and dividends) dropped -21.4% (US$ terms, -15.9 % UK£ terms) over the quarter. Our Global Best Ideas Equity Fund returned -13.6% (US$ terms, -7.8% UK£ terms, B-class).

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GLOBAL EQUITIES – 2020 ANNUAL LETTER

Investment returns for 2019 exceeded most expectations. The MSCI World Index (including Emerging Markets and dividends) delivered a +26.6% return over the year (in US$ terms; +21.7% in UK£ terms). Our Global Best Ideas Equity Fund (the “Fund”) returned +30.7%1 (US$ terms).

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GLOBAL EQUITIES QUARTERLY LETTER Q3 2019

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.

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GLOBAL EQUITIES QUARTERLY LETTER Q2 2019

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).

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GLOBAL EQUITIES QUARTERLY LETTER Q1 2019

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.

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22 JUNE 2020

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

Read Fund Manger Gerrit Smit’s latest Global Equity Perspective

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8 JUNE 2020

“The whole is more than the sum of its parts.” – Aristotle

Read Fund Manger Gerrit Smit’s latest Global Equity Perspective

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25 MAY 2020

US institutional investor confidence is currently at historic low levels, two standard deviations away from the average.

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11 MAY 2020

“One cannot develop an effective philosophy without having been exposed to life’s lessons.” - Howard Marks

Read Fund Manger Gerrit Smit’s latest Global Equity Perspective.

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20 APRIL 2020

“Well bought is half sold.” - Howard Marks

Read Fund Manger Gerrit Smit’s latest Global Equity Perspective.

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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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The following web pages contain information on Stonehage Fleming Global Best Ideas equity Fund. This fund is a collective investment schemes (CIS) managed by entities of Stonehage Fleming Investment Management Limited. This fund has not been approved by the Swiss Financial Market Supervisory Authority (FINMA) for distribution in or from Switzerland to Non-Qualified (retail) investors. The information contained in the following pages is only directed to "Qualified Investors" domiciled in Switzerland, in accordance with Article 10 of the Federal Act on Collective Investment Schemes of 23 June 2006 ("CISA").

By clicking on the button "I agree" you certify that: 1) you are domiciled in Switzerland 2) you are a ‘Qualified Investor’ in accordance with ‘CISA’. A ‘Qualified Investor’ is defined as:

  • Regulated financial intermediaries such as banks, insurance companies, fund management companies and asset managers of collective investment schemes
  • Public entities and retirement benefits institutions with professional treasury operations
  • Companies with professional treasury operations
  • Independent (unregulated) asset managers who act under discretionary management mandates for HNW individuals who have each opted to be considered as Qualified Investors
  • This information is not directed at any US person or any person in the US and the information does not constitute an offer or solicitation to buy or sell, or an invitation to buy or sell shares of any Stonehage Fleming fund to any US person or to any person in the US

We have appointed ‘ARM Swiss Representatives SA’ as our Swiss representative for these funds. The paying agent in Switzerland is Banque Heritage S.A. The Prospectus and the Articles, KIIDs and additional documentation including the annual and semi-annual report can be obtained free of charge from the representative in Switzerland. Full contact details are contained within the fund documentation.

 

This site is not available in your jurisdiction. If you require further information about Stonehage Fleming Investment Management please contact us at enquiries@stonehagefleming.com.

 
Group Website

I confirm I am accessing the website from the country indicated.

 

The following web pages contain information on Stonehage Fleming Global Best Ideas equity Fund. This fund is a collective investment schemes (CIS) managed by entities of Stonehage Fleming Investment Management Limited. This fund has not been approved by the Swiss Financial Market Supervisory Authority (FINMA) for distribution in or from Switzerland to Non-Qualified (retail) investors. The information contained in the following pages is only directed to "Qualified Investors" domiciled in Switzerland, in accordance with Article 10 of the Federal Act on Collective Investment Schemes of 23 June 2006 ("CISA").

By clicking on the button "I agree" you certify that: 1) you are domiciled in Switzerland 2) you are a ‘Qualified Investor’ in accordance with ‘CISA’. A ‘Qualified Investor’ is defined as:

  • Regulated financial intermediaries such as banks, insurance companies, fund management companies and asset managers of collective investment schemes
  • Public entities and retirement benefits institutions with professional treasury operations
  • Companies with professional treasury operations
  • Independent (unregulated) asset managers who act under discretionary management mandates for HNW individuals who have each opted to be considered as Qualified Investors
  • This information is not directed at any US person or any person in the US and the information does not constitute an offer or solicitation to buy or sell, or an invitation to buy or sell shares of any Stonehage Fleming fund to any US person or to any person in the US

We have appointed ‘ARM Swiss Representatives SA’ as our Swiss representative for these funds. The paying agent in Switzerland is Banque Heritage S.A. The Prospectus and the Articles, KIIDs and additional documentation including the annual and semi-annual report can be obtained free of charge from the representative in Switzerland. Full contact details are contained within the fund documentation.

 

This site is not available in your jurisdiction. If you require further information about Stonehage Fleming Investment Management please contact us at enquiries@stonehagefleming.com.

 
Group Website

The information given and services referred to are not directed at any person in any jurisdiction where (by reason of that person's nationality, residence or otherwise) the publication or availability of this information is prohibited. This information does not constitute an offer or solicitation to buy or sell, or an invitation to buy or sell shares of any Stonehage Fleming fund to any US person or to any person in the US.