The equity department manages strategies of listed equities within the following areas:
- Danish equities
- Global equities
- Global value equities
- Emerging markets equities
All equity strategies are different in terms of the geographic investment universe and the underlying investment processes. However, there are some similarities in the research approach in the stock-picking part of the investment processes. The main focus of the research is to identify companies’ long-term earnings potential and compare this with the earnings growth embedded in the current share price. In our company research we focus on the following key elements:
- Understanding of the business model and products
- The company’s ability to create a higher economic return over the next 2-3 years than that of the general economy, and whether this is reflected in the share price
- The potential for sustained or improved earnings growth and return on shareholders’ equity
- The ability to sustain or improve the market position of the products
- The competences, strategy and focus of the management team
- Corporate governance, level of information and CSR
In order to effectively screen the investment universe and optimise the portfolio construction, the use of proprietary screening-based research tools is an integrated part of the investment process for some of the strategies.
The strategies are all characterised by a broad investment universe, but at the same time the portfolio construction is concentrated and reflects a high conviction approach in the selection of securities. As a consequence benchmark focus is limited, and benchmark is primarily used as a performance reference.