Investment Philosophy and Process
Email
PrintOur Investment Philosophy
JF Capital Partners’ investment philosophy is based on the belief that financial markets are an ‘emotional discount mechanism’. That is, they discount underlying fundamentals with either excessive euphoria or undue desperation. Only in the long-run do markets properly reflect underlying business fundamentals.
To exploit this market inefficiency we use a research-driven bottom-up investment process to gain an in-depth understanding of a company’s fundamental value and the risk associated with this value.
Insight + Process = Results
Our investment process
JF Capital Partner’s investment process is robust, transparent and, most importantly, value creating. Our distinct strength is our ability to combine the art and science of investing through our focus on idea generation and a sophisticated portfolio construction.
Insight through idea generation is at the heart of what we do.
Our large in-house research team is focused on generating investment insights from proprietary research. This research indentifies the key drivers of each company’s profitability and success. We explicitly forecast various scenarios for every key driver for every company.
This explicit scenario analysis and forecasting allows us to produce a probability-weighted value for each stock using free cash flow discounted at the company’s cost of capital. Our analysis of scenarios also enables us to generate explicit probability-weighted risk measures for each company.
The process of efficient portfolio construction is a distinct advantage.
JF Capital Partners utilises a proprietary optimisation process to generate portfolio ideas that conform to specific constraints that we place on the model.
This efficient platform allows us to build tailored portfolios that take explicit account of, among other things, tax and franking credits, transaction costs and liquidity. However, the optimisation process does not dictate investment decisions.
Our portfolio construction team consists of Steven Semczyszyn, Michael Fitzsimmons, Pierre Prentice and Wes Campbell. On a daily basis this team considers the ideas generated by the optimisation process in light of all relevant macroeconomic and market factors, such as, liquidity and news flow.
Steven Semczyszyn, our Senior Portfolio Manager is responsible for all portfolio decisions.
For further detail on our investment process please contact us.