At Element Investment Managers, we believe that a disciplined long-term contrarian approach is the most reliable way to achieve superior absolute returns for investors over the long term.
The structure of asset markets results in the majority of market participants adopting a short term approach with an emphasis on short-term (12 months or less) earnings and price forecasts. Our disciplined focus on the long-term intrinsic value of assets and companies allows us a natural competitive advantage over the majority of other market participants. Our concerns with respect to a short-term focus are best summed up in the following quote from the CFA Institute’s paper, “Breaking the Short term Cycle” (July 2006):
“The obsession with short-term results by investors, asset management firms and corporate managers collectively leads to…destroying long term value, decreasing market efficiency, reducing investment returns and impeding efforts to strengthen corporate governance.”
We are index agnostic as our aim is to research companies and assets and buy them when their current prices are below their long term intrinsic values and have the discipline to hold them until these intrinsic values are realized.
As a result of our long-term contrarian philosophy, it is likely that our portfolios will at times be materially different from other market participants or indices against which we are measured.
Disciplined Investment Process
At Element Investment Managers we are proud of our disciplined investment process. From idea generation to detailed industry research, company management meetings, fundamental company research, portfolio construction, voting and engaging on our clients’ behalf and continual review of our performance and attribution analysis – there is a disciplined yet dynamic process involving all members of our investment team.
Our Investment Process also integrates our detailed Environmental, Social and Governance (ESG) research into our fundamental research of companies in our portfolio universe. We were the first SA asset manager to sign the UN Principles for Responsible Investment and we remain a leader in the Responsible Investment field in South Africa with a well established track record over almost a decade.
The experience, qualifications and depth of our operations and client service staff allows our investment team to focus on its core discipline of research.
The investment process facilitates an environment where individual contributions are valued and rewarded and team effort is encouraged.