Our Investment Philosophy
Altrinsic’s investment philosophy is embodied in its name, derived from the Latin word altus and intrinsic.
Altus: connotes the firm’s pursuit of peak performance and the depth of its analysis.
Intrinsic: refers to Altrinsic's focus on the drivers of companies’ intrinsic value and financial productivity.
Searching for opportunities amid change and uncertainty, Altrinsic's investment team seeks to capitalize on inefficiencies in the world’s equity markets by taking a long-term view and leveraging in-depth fundamental analysis, global industry knowledge, and its distinctive cross-border frame of reference. As the value of information has become increasingly commoditized, the value of experience, perspective, judgement, and common sense have increased.
Distinctive attributes of our investment process and philosophy include:
Maintaining focus and clear objectives at both the organizational and individual level. Altrinsic's analysts seek to identify a select number of undervalued, high-conviction, long-term investments during the course of a year.
Prudent flexibility. The determination of intrinsic value is not confined to a narrow definition of value stocks. As the team looks for opportunities amid change and uncertainty, Altrinsic's process incorporates flexibility that allows it to capitalize on two broad types of investments:
1. Undervalued higher-quality companies with more sustainable return on capital profiles
2. Undervalued businesses in which profitability levels are depressed and/or are likely to improve
This flexibility allows the investment team to navigate various market environments.
Engagement throughout a company’s capital structure. Although Altrinsic invests primarily in the common equity of corporations, the investment team analyzes a company’s entire capital structure as if the firm were to buy the company outright. This allows Altrinsic's investment team to better determine risk and identify margin of safety. Bottom-up analysis that incorporates a 360-degree assessment of all factors affecting a prospective investment (including positive and negative, long-term historical and pro forma, and micro and macro).
Portfolio managers who are also analysts. This results in a heightened degree of engagement, while addressing the need for humility and accountability.
Nimbleness as an asset; size can be a detriment. Bureaucracy can stifle a team’s ability to express competitive strengths in its portfolios.
Risk management is less about commonly used measures of tracking error or VAR. Instead, it is more about processes, prudence, and the pursuit of favorable outcomes that are disproportionate to the amount of risk being taken, while seeking to identify unintended risk that can emerge in portfolios.
Culture is everything. Altrinsic works as a team.