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Investment expertise

Global Equity Research

UBP’s dedicated team of experienced global sector/country analysts aims to take advantage of investment opportunities that present themselves over the course of a company’s life cycle. The team conducts rigorous fundamental and quantitative analysis on a large number of firms, and their stock-picking has outperformed the MSCI AC World TR in almost every calendar year since 2005.


Concept

During a typical company’s life cycle (i.e. growth – maturity – decline), its business model generates varying levels of cash flow return on investment  CFROI). While superior CFROIs tend to fade down to the Cost of Capital (CoC) as value creation opportunities attract competition, leading to margin compression, inferior returns may “fade up” to the CoC as a result of restructuring or competitors exiting the market. The team looks to recommend and invest either in companies with consistent, superior CFROIs and that steadily create value over the long term but that are not yet discounted by the market, or in turnaround stories that are drastically undervalued. The team also focuses on companies that are experiencing a phase of accelerating growth that may not yet be fully appreciated in terms of the magnitude and duration of the widening positive spread between CFROI and CoC.

Research process

  • The team conducts detailed, bottom-up analysis, both fundamental and quantitative, on the companies in their sectors/countries.
  • The analysts and the GIC identify themes of investment interest.
  • The analysts use their experience to look for companies within these themes which have a history of “beating the fade” (i.e. those firms which continue to generate superior returns rather than revert to average returns) and assess whether they are likely to continue to do so in the future. They also seek out interesting turnaround stories and companies showing strong growth.
  • They conduct regular company visits and management meetings as they seek out catalysts that could lead to growth (e.g. changes in management, restructuring and new products).
  • Once companies have been identified, they perform in-depth, fundamental analysis, including CFROI forecasts and asset growth rates for the next five to ten years.
  • The analysts calculate the discounted cash flows for the forecast period. They use these to derive the fair value of each company and set a twelve-month price target.

Key points

  • Excellent long-term track record
  • Consistent outperformance in all market phases
  • Disciplined stock-selection methodology and investment process
  • Worldwide coverage of all equity sectors
  • Experienced and well-resourced team
  • Committed to meeting clients’ needs

Documents

Research team

  • An experienced team of eight analysts, several of whom have been through a number of market cycles.
  • They work closely with UBP’s economists, strategists and fund managers.
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Institutional clients

With a team of more than 200 people, UBP Asset Management has built an on-the-ground presence in the world’s major markets through organic growth and selected partnerships.

Insight 20.04.2017

Investment Outlook Q2 2017

Sustained and synchronised growth: world growth continues on a positive trajectory in Q2, driven by the positive trend in place in the US, sustained activity in Asia and a more constructive outlook for the Eurozone. Growth looks to be sustained and synchronised across the main regions, thanks to firmer activity in the manufacturing sector and a positive trend in consumption.