Comgest Growth America

Comgest Growth America is an unconstrained, highly concentrated portfolio of between 25-35 companies. This quality growth strategy endeavours to find the highest quality companies that meet their stringent ESG criteria across the US.

Our opinion

This fund benefits from a very clear process and experienced management team that have helped guide the fund to outstanding performance throughout their tenures. We like the employee-owned collegiate partnership culture of Comgest. They also operate with a flat hierarchy where the managers serve the dual role of portfolio managers and analysts as well. We would expect the fund to continue to repay investors' trust in the future.

Company description

Comgest was founded in 1985 and is entirely owned by its employees through a partnership structure. Equity is not restricted to senior managers and the company is proud that approximately 75% of Comgest employees are shareholders. Comgest is set up to do one thing – manage quality growth equity portfolios for the long term. In this, it has been extremely successful and it now runs around $30 billion of assets. All Comgest funds have the same philosophy and process, which is applied to different parts of the world and each one is high conviction and concentrated, unconstrained by any benchmark. Comgest believes continuity - of their team, style and approach - is its greatest asset. Comgest was awarded the Elite Provider for Equities rating in 2019, 2020 and 2021.

Fund manager

Christophe Nagy joined Comgest in 2009 and is an analyst and portfolio manager specialising in US equities. Christophe co-leads Comgest’s US equity strategy. Before joining Comgest, he worked at Mercer Consulting from 1991, at Carmignac Gestion from 1998 where he managed global growth portfolios, and then from 2002 as a senior portfolio Manager at Edmond de Rothschild Asset Management. Christophe holds a Master’s degree in Engineering from Ecole des Mines in St-Etienne in France and received an MBA from the INSEAD graduate business school near Paris in 1991.

Justin Streeter joined Comgest in 2015 and is an analyst and a portfolio manager specialising in US equities. He previously worked at J.P. Morgan in San Francisco in 2013 as an M&A healthcare analyst and, prior to that, at J.P. Morgan’s London office in a similar role. Justin began his career with Macquarie Capital Partners (London) and Société Générale (Paris). Justin graduated from Emlyon Business School (France) with a Master’s degree in Management and Corporate Finance. He is also a CFA charterholder.

Christophe NagyFund manager

Investment process

The team start by carrying out a broad screen of the 2,200 strong investment universe. They focus their analysis on key quality growth criteria. This includes the evaluation of business models, organic growth potential, barriers to entry, sustainability and management quality.

This screen leaves between 160-180 stocks which they characterise as the watchlist. The team then conducts fundamental analysis of the remaining companies, analysing their competition, market and ESG factors.

Companies that are deemed to not meet the appropriate standard are removed, leaving between 60-80 stocks. These are a list of quality growth companies eligible for inclusion in the portfolio. The next phase involves a final assessment of growth and quality aspects, with a unanimous team decision required for inclusion. Step four is focused on valuation where the potential upside of the remaining stocks is assessed. The final portfolio holds between 25-35 names.

ESG

ESG - Explicit

They have a dedicated ESG team of analysts that perform fundamental company research together with the lead investment analyst for each company. They prepare and update an ESG assessment which results in the assigning of an ESG Quality Level ranging from 1 (leader) to 4 (improvement expected) for each stock. The team also has access to multiple ESG data providers that complements their own research and they maintain a proprietary ESG Dashboard to collate ESG metrics at stock and portfolio level.

Risk

Risk monitoring is fully integrated within their investment process and is carried out across both investment and operational teams daily. The fund is very high conviction and concentrated with around 30 holdings, so there is stock-specific risk and investors are reliant on the team getting their investment choices correct. When buying new stock the team will typically start with a 1% position and build upon that. There are no hard sector or country limits, but the portfolio is carefully managed to ensure it is well diversified.

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