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The team manages portfolios against a range of European indices. Rigorous company analysis constitutes the heart of our investment process. The WMAM equity radar, an objective quantitative stock screen identifies pricing anomalies, which our in house research team evaluates to find stocks that qualify for inclusion in a portfolio. Our approach is governed by a simple philosophy: we establish our own view about a company (value), compare this to what the market thinks (price), and invest where we find disagreement. The APT risk management system optimises the balance between risk and reward of the best ideas we have identified. All portfolios are characterised by high stock-specific risk. But for the risk of being labelled a pure value investor, we would describe our process as Value at a Reasonable Price (VARP).

Philosophy

The market is a matrix of investors and investments. Investors' subjective behaviour causes the prices of investments to deviate from their intrinsic value. By implementing a disciplined investment approach that combines objective quantitative stock screening and fundamental bottom up stock analysis we can identify these pricing anomalies and provide enhanced returns for our clients.

Process

The investment process is characterised as a three stage filtering process:

• Screen; the universe of stocks is ranked according to investment appeal by our in house quantitative screen, WMAM Equity radar, which is made of three inputs (a multi-factor model, a CFROI model and a Technical model).
• Analysis; the subjective part of the process, where our analysts establish their own fundamental view of the value of a stock through disciplined analysis using the WMAM 10 Key Questions framework.
• Construction; the conversion of our analysts' strongest ideas into portfolios using the APT risk management optimiser to ensure that our models have high stock specific risk, limited unintended risk and adhere to clients' requirements.

There are five distinct features to the WMAM investment process:
(i)  In order to maximise the effectiveness of our research capacity we use an investment screen (the WMAM Equity Radar) to identify stock opportunities.
(ii) Our emphasis is on bottom up fundamentally researched stock ideas. We are benchmark aware, but not benchmark driven.
(iii) We have synthesised company research into 10 key questions to ensure that our focus is on meaningful investment analysis that is commercial and not purely academic.
(iv) In creating our model portfolios we aim to deliver the stock selection driven portfolios that our clients request. Our portfolios are characterised by high levels of stock specific risk.
(v)  Finally, the APT risk management system balances risk and reward in line with clients objectives and limits unintended risks.

Benchmarks

Portfolios are generally managed against DJ Stoxx European Indices. Other benchmarks can be established in line with client requests.

Team

The European equities team is made up of 14 investment professionals including two small cap focussed managers. The team is located in Duesseldorf and London.

Key Strengths

• Investment Approach
  Disciplined and clearly structured three stage investment process with a combination of fundamental and quantitative analysis.
• Quantitative Input
  An in-house quantitative system, the WMAM Equity Radar, supports our efforts in both stock selection and portfolio construction.
• Stock Selection
  Research focuses on long-term value creation and strength of franchise, to identify the fair value of mispriced investment opportunities utilising a consistent framework (WMAM 10 Key Questions). Stock selection is targeted to contribute 70-80% of value added.
• Portfolio Construction
  A portfolio of best ideas which are optimised to ensure portfolios are characterised by high stock specific risk.
• Rigorous Risk Control
  Portfolios are tailored to client risk budgets using the APT risk management system to optimise stock specific risk within these parameters.
• Team Approach
  Client portfolios benefit from input from all the sector specialists who ensure that portfolios include their best ideas and warrant consistent quality of investment decisions.
• Experienced Team
  The team has, on average, 10 years experience in the industry.