Philos Partners Global Core Select, our global equity strategy, takes a long-term business-ownership approach while maintaining a discount to intrinsic value as a foundation. We seek out well-established, cash-generating businesses that are top providers of critical products and services, and we try to purchase their publicly traded equity instruments at a discount to their true value*. Estimates of intrinsic value are based on a proprietary study of future free cash flows and returns on capital. We use a methodical investment selection process that considers company, management, and financial factors.
Philos Partners Global Core Select would typically invest in 30 to 40 U.S. and non-U.S. companies with market capitalizations greater than $3 billion, with a minimum of 40% of the portfolio invested in non-U.S. companies. The intended holding period is three to five years, and investments are typically sold if their value rises above our estimates of intrinsic value.
Companies that have the following business, managerial, and financial characteristics, in our opinion, are well positioned to create value for shareholders in a wide range of economic and market conditions.
Characteristics of Business
- Essential products and services
- Loyal customers
- Leadership in a lucrative market area or industry
- Long-term competitive advantages
- Reliable operators
- Appropriate capital allocations
- Significant share ownership
- A strong balance sheet and free cash flow
- High rates of return on investment
*Philos's estimate of the present value of cash that a company can generate and deliver to shareholders over the course of its remaining life.
-The strategy may take large positions in a few issuers, increasing the risk of price volatility.
-Currency risk, increased volatility, political risks, and differences in auditing and other financial standards are all factors to consider when investing abroad.