IFSL Evenlode Global Equity

Evenlode's primary focus is on 'quality' companies that can achieve sustainable growth over time with minimal capital reinvestment. These companies typically possess intangible assets that create high barriers to entry, offer products and services valued beyond price, operate in growing markets, and proactively reinvest in their core competitive advantage.

The proprietary research and portfolio management software system, “Eddie”, helps the team identify compelling valuation opportunities, which the managers will discuss in their weekly investment team meetings. Eddie is also used as part of the ongoing, daily portfolio management and research process.

In essence, Evenlode's investment approach revolves around identifying market-leading companies with high cashflow returns on capital, manageable business risks, and limited financial leverage. The aim is to generate returns through the growth of fundamental value over time, driven by the favourable economics of the underlying business and organic compounding of free cash flow.

A risk committee, comprising the CEO, CFO, COO, and Operations Manager, meets quarterly to monitor business risk and report to the Board. Risk management is at the heart of the investment process. They assess all companies in their universe on 10 risk factors and score them from A (best) to E (worst). Risk factors include aspects like moat strength, pricing power, balance sheet, ESG etc. They also hold maximum position meetings, where bull and bear cases are presented on each holding. Both this and the risk scores help them decide on maximum position sizes.

ESG - Integrated
Evenlode integrates ESG considerations into its investment philosophy, believing that they can enhance returns and create positive societal impact. ESG factors are part of the risk management framework, involving all team members and specialist Stewardship Analysts.

The managers believe that several environmental and social risks have evolved into long-term business risks. So, as part of their ESG analysis and engagement, they analyse companies’ impacts surrounding several environmental issues including climate change, biodiversity, deforestation and plastic pollution, regularly monitoring companies’ emissions and climate targets. They also look at social issues surrounding companies’ operations, supply chains and products and services. Understanding the materiality of these specific ESG factors for a given company plays an important role in how they integrate ESG into their investment process.

These considerations contribute to both the initial selection of potential investments, and the ongoing engagement activities they have with portfolio holdings.