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We invest in a portfolio of global small and mid cap international companies.
Taking a bottom-up approach to investing we undertake deep fundamental research of both the quantitative and qualitative aspects of investee companies.
Our strategy is benchmark unaware because we believe this unconstrained approach allows maximum flexibility to pursue attractive risk-adjusted investments.
Our intention is to hold high-quality businesses that generate attractive returns on capital employed through a full market cycle, with low levels of debt, managed by highly competent and aligned executive teams.
We aim to achieve annualised returns, in excess of the MSCI World SMID Index (after all fees and expenses) measured over a market cycle, which we consider to be seven years.
Number of Stocks
30–40
Market Capitalisation
US$500m – $40bn
Style
Long-only quality
Objective
Benchmark +3% (estimated 8–12% p.a. through the cycle)
Benchmark
MSCI World SMID AUD (Net)
Responsible Entity
The Trust Company (RE Services) Limited part of the Perpetual Group
Administrator
Apex Fund Services
Auditor
Ernst & Young
Fairlight’s investment strategy is executed with an ethical mindset.
We use hard exclusion screens to eliminate harmful industries, such as tobacco, armaments, gambling, alcohol and mining.
Each of the companies we research is also scored across a range of environmental, social and governance (ESG) metrics. These generate a cost of capital charge that is an input into a company’s valuation. Companies with relatively poor ESG practices incur a larger discount rate than those that are best practice.
We practice active ownership by engaging with companies on ESG issues (including disclosure) and voting our proxy rights.
Stock Profiles
Auto Trader has been a core holding in the Fund since 2018, fulfilling its role in the portfolio as a ‘stable compounder’ and delivering our investors an excellent return. In this update, we discuss the investment case for Auto Trader, exploring how its digital leadership and resilient business model continue to deliver consistent earnings growth.
Stock Profiles
In this monthly we explore a stable compounder that we have held in the Fund since its inception. VeriSign is one of the most important companies that most have not heard of. It operates the backbone of the internet, managing .com and .net domains with a monopoly position and robust cash flow.
Stock Profiles
In these turbulent times for markets, the resilience of the portfolio is allowing the investment team to remain focussed on assessing businesses’ competitive advantages and identifying new opportunities rather than having to reposition the portfolio for likely more challenging economic times.