Teviot’s approach is founded on the research and origination of our own investment ideas. We expect this to be a key competitive advantage in the face of regulatory changes.
Illiquid markets and a sparsity of independent investment research among small companies lead to the asset class presenting a diverse range of value anomalies. Regulatory developments in the shape of MiFID II are reducing the coverage and availability of research. This will only increase the number of anomalies and as such, represents a significant opportunity for Teviot.
The investment process is based around the core fundamentals of the company viewed through the lens of a value investor. Analysis will consider the profile of management and governance, the strategic positioning of the business in the context of its broader markets. A detailed financial analysis will focus on the qualities of earnings and cashflows presented. The process is bottom-up driven and capital is allocated to the best value opportunities. There is an asset allocation overlay and the portfolio is constructed with an appreciation of risk at the portfolio level.
A key area of differentiation at Teviot is the use of independent industry data to inform the investment decision. We live in an age of abundant data. If you frame your questions well, the answers are almost certainly freely available.