Menu

Investment Process

What We Do

The HGP international equity portfolios are concentrated and derived from a universe of publicly traded companies located outside of the United States. The firm employs a bottom-up, “quantamental” approach to select stocks that are assembled into portfolios.

  • Proprietary multi-factor, quantitative model is employed to identify companies with appealing characteristics trading at attractive valuations

  • Validates the information unearthed through the quantitative screening process
  • Verifies the sustainability of the screen results, financial statements, company-specific factors, and industry dynamics to better understand the underlying businesses
  • Seeks stocks, entire industries, and/or countries that exhibit asymmetric risk profiles to safeguard investors, while offering the potential for compelling returns

  • Concentrated, diversified and driven by bottom-up process
  • Generally limit cash to 5% of the total portfolio 
  • Results in tracking error ranging between 3% and 7%, with objective of delivering superior risk-adjusted performance over market cycles

Stocks are sold for a variety of reasons, including:

  • Realization of the fair value or target price
  • Limit positions to 5% of total portfolio value
  • Change in the management or a change in the opinion of management
  • Significant deterioration in company fundamentals

  • Quantitative Model: Proprietary multi-factor, quantitative model is employed to identify companies with appealing characteristics trading at attractive valuations
  • Fundamental Analysis: This stage validates the information unearthed through the quantitative screening process; verifies the sustainability of the screen results; and analyzes income statements, balance sheets, cash flow statements, and other company-specific factors, industry dynamics and macroeconomic factors to better understand the underlying business. Lastly, the firm patiently waits for inflection points to establish positions. HGP seeks stocks, entire industries, and/or countries that exhibit asymmetric risk profiles to help safeguard investors while offering the potential for compelling returns.
  • Portfolio Construction: Concentrated, broadly diversified portfolios are constructed that range from 40 to 60 stocks. Regional weights range from +/- 20% of index weight. Sector diversification ranges from +/- 10% of the index weight. Security positions are generally initiated at 2% and may range up to 5% of the total portfolio before being trimmed to mitigate risk. Cash is a result of the investment process but generally ranges no higher than 5% of the total portfolio. The portfolio is constructed to achieve a tracking error of 3% to 7% and the objective of delivering superior risk-adjusted performance over a market cycle.
  • Sell Discipline: Stocks are sold for a variety of reasons, including realization of the fair value target price; change in the management or a change in the opinion of management; conviction check at relative 25% of under performance; and significant deterioration in company fundamentals.

Sign-up for Quarterly Portfolio Updates

Menu
Find us on
Linkedin