Investment Philosophy
We invest in best-in-class businesses for their quality, strategic competitive edge and value.
Our investment philosophy focuses on investing in the world’s best-in-class companies. They’re selected on the basis of their organic revenue growth, the sustainability of their earnings growth, the quality of their management, and the strength of their strategic competitive edge. Naturally, we aim to invest in these exceptional businesses when they offer an attractive valuation point.
We buy with the intention of holding for the long term to benefit from their consistent growth in earnings. Ours is a pragmatic approach. While we invest with the belief that ‘good news’ often goes under-analysed, especially when it’s gradual, we’re also free to change our minds about a company when the facts change.
Central to our philosophy is the belief that building a portfolio of such best-in-class businesses at an attractive valuation provides the greatest potential to create favourable compound returns over time.
We believe that a portfolio of such high-quality companies, held for the long term, can both protect, and grow, an investor’s wealth over time.
Core
Values
- Quality: We strive to deliver outstanding quality in everything we do.
- Ownership: As investors, we think like a company owner allocating capital and buying another business with the intention to hold it indefinitely.
- We make long-term decisions to maximise returns.
- Strategic: We think strategically for the full business cycle, looking to unlock value and manage risk.
Long-term
Thinking
- Long-term investments, low portfolio turnover, minimise costs, maximise returns.
- A select few of our holdings have been held since we launched the Global Best Ideas Equity Fund in 2013.
- Our holdings demonstrate exceptional long-term earnings growth, margin strength and cash-flow generation.
Always
Disciplined
- Pragmatic valuation approach, signal based.
- Formal and strict sell discipline, act fast and efficiently.
- We change our minds when the facts change.
- And … Good news often goes under-analysed, especially when it is gradual.
How we define quality growth
The ability for a company to achieve an attractive level of sustainable profitable growth over the long term.
Every potential holding has to pass the team’s 15 quality tests in order to become part of what is a concentrated, long-term portfolio of 20-30 stocks. It also has to demonstrate a strong competitive edge and the pricing power that accompanies this.
The Fund’s enviable long-term track record demonstrates that a portfolio of such companies, held for the long term, can both protect, and increase, an investor’s wealth over time.
THE FOUR PILLARS OF OUR INVESTMENT STRATEGY
We seek companies with all of the below characteristics.
Pillar 1
SUSTAINABLE ORGANIC
GROWTH
Sustainable, reliable, recurring organic growth
Pillar 2
MANAGEMENT
EXCELLENCE
Outstanding, energised, incentivised management
Pillar 3
EFFICIENCY
Excellent operational efficiency
Pillar 4
STRONG
CASH-FLOWS
Persistent, strong, growing free cash-flow
Investment Process
We screen our universe with 15 quality tests in order to identify the best candidates in terms of high profitability, sustainability of revenue and earnings growth; liquidity; and low volatility. Within this, we focus on the organic growth, operating margin, return on capital, debt and leverage, dividend record, cash conversion and ESG risks.
We have a universe of over 150 quality candidates from which we have chosen a strong bench of high-quality companies, all competing for a place in our portfolio. In the event of a material change, our sell discipline leads us to exit such holdings, and we replace them with a new best-in-class candidate that elevates the fund’s overall quality.
Analyst Coverage, Rating and Conviction
- • Generalist analysts, culture of challenge and support
- • In-house research
- • Conviction aligned incentives
Portfolio Construction
- • Best ideas + high conviction
- • Attractive valuations
- • Correlation + diversification
- • Analyst conviction
- • Independent risk analysis
Portfolio Management
- • Full alignment of research and portfolio management teams
- • Independent risk oversight
- • Continual coverage
- • Macro and market research
Sell Discipline
- • Sell to enhance overall portfolio quality
- • Sell overvalued companies
- • Sell if competitive edge eroded
- • Red and yellow flag discipline + continual relative performance monitoring
People
We are a highly experienced and diverse team of five investment professionals, combining deep research expertise with disciplined portfolio management. Since inception, we have maintained a consistent philosophy, strategy, and process, supported by exceptionally low team turnover. Operating with the focus and agility of a boutique manager, while benefiting from the broader infrastructure of our group, we bring both independence and stability.
Stonehage Fleming
Today, Stonehage Fleming clients have entrusted us with the management, fiduciary oversight, and administration of, in excess of US$175bn (£140bn). We employ around 1,000 people worldwide and offer our services from 20 offices in 14 different jurisdictions.
Independently owned by management, staff, and a publicly-quoted family investment trust with a patient capital philosophy, our goals are precisely aligned with those of the clients we serve.
Stonehage Fleming Investment Management is responsible for US$26 billion of client assets. Within this, the Global Equity Management division manages US$4.4 billion in client investments into the flagship Global Best Ideas Equity strategy, with the Stonehage Fleming Global Best Ideas Equity Fund accounting for US$2.28 billion of investment from clients.
All figures as at 30 September 2025.
