INVESTMENT STRATEGY

Creative, disciplined investing with a focus on performance

The firm’s culture emphasizes creativity and flexible thinking in our search for unique investment insights. It is a performance driven culture where the focus is on managing clients’ money to achieve above average returns with limited downside risk. We are disciplined in waiting for appropriate opportunities to emerge and prepared to be patient as our investment thesis plays out over time.
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We are entrepreneurial in the sense that our investment team consider themselves business analysts first and foremost, and each investment is viewed as a purchase of a business rather than just shares. This approach requires our investment team to gain in-depth first hand knowledge of our portfolio companies. Our culture allows us to build our performance by investing in world-class businesses with durable competitive advantages acquired at bargain prices. Independent thought is encouraged and all our investment research is performed inhouse.

Dominant companies

JBS investments typically invests in listed businesses with strong franchises, leading market positions, strong growth prospects and the ability to generate high returns on capital. Such companies are rarely available at cheap prices. To acquire such companies at attractive prices, we seek to invest in them when they are going through periods of transition and accordingly become mispriced.

Seizing opportunity

Market participants are increasingly incentivised to focus on short-term performance which can lead to irrational pricing and opportunities for long term focussed investors. The market typically provides a limited window of opportunity to capture the difference between what an emotional investor will sell at versus the fundamental value of a company. Accordingly, once we have identified a compelling fundamental investment opportunity, we must be prepared to act decisively.

The key to success is paying the right price, so that the risk lies in the time required for value to be realised, rather than unavoidable
fluctuations in price.

A focus on long-term value creation in times of uncertainty

The best investment opportunities arise in times of great uncertainty. The heightened uncertainty that comes with such situations leads to a scarcity of capital as investors are reluctant to act due to the lack of easy to follow investment metrics. During such times our patient outlook enables us to look for high-quality companies that are trading at meaningful discounts to fundamental value.
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We particularly look for businesses that have declined in value for reasons outside of their control. This is important given our belief that the best outcome is achieved by holding great businesses for the long term.
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Although markets tend towards efficiency over the long term with the value of securities determined by fundamental factors, temporary pricing inefficiencies often arise in such situations.

Outstanding management teams

We seek to be associated with the highest quality business managers, in terms of ability, integrity and shareholder focus. We seek to establish positive and productive relationships and often seek to share our proprietary research and investment views where required.

Detailed Research

Once we have a promising investment idea we then conduct detailed research as to whether the security in question is misunderstood and mispriced. Our indepth research process involves a review of financial statements, company filings and company visits. Our overall investment philosophy is value-driven and based on disciplined, extensive fundamental analysis and research. We then prepare a detailed report setting out the investment thesis. The report is then subject to internal team debate to identify potential flaws in analysis.