An Investment Process Rooted in Capital Preservation and Absolute Returns
True global thematic investing is an innovative strategy utilized only by a handful of portfolio managers. It seeks to capitalize on the changes sweeping across the globe brought about by broader investment themes.
Thematic investing hinges on the in-depth analysis of a blend of fundamental, macro economic and macro political dynamics to identify companies favorably poised to derive maximum benefit from the structural, technological, socio-economic and cultural changes reshaping the global economy. Some of LCM’s past themes included growing affluence in the developing world, aging population, growing agricultural needs, technology and urbanization.
LCM’s thematic approach seeks to capture the major cyclical and structural influences on the world’s economies and stock markets at the inception of their development. The related social, demographic, economic and industry investment themes, deemed by LCM’s investment team as asymmetric opportunities in its clients’ favor, determine the magnitude and overall strategic direction of the portfolio.
Being a pure global thematic investment firm provides us with a distinctive strategic advantage—the ability to look across all geographies to identify emerging and rewarding investment trends.
Today, companies, regardless of their physical location and wherewithal, possess the intrinsic potential to become almost instantly global empires. They can sell their products quickly everywhere around the world. In addition, their ability to leverage new transportation systems, the Internet and cloud computing empowers them to achieve rapid growth and multi-billion dollar valuations like never before. A tangible example of this phenomenon is the fact that an emerging country like Indonesia has become in a relatively short time the world’s second largest user of services like Facebook and Blackberry.
In this new environment, only those wealth managers that employ a true global thematic approach like LCM are able to fully capitalize on new trends and extract maximum value from their impact on specific regions of the world.
With the ability of companies to spur rapid demand for their products and services from the most remote areas of the world, investment strategies that concentrate on single geographies have become undoubtedly highly restrictive. A U.S.-focused manager will inevitably miss the numerous opportunities arising around the globe. So, an Indonesia-based manager will unsurprisingly overlook the investment opportunities created by foreign companies sweeping into that country, because its limited focus on domestic stocks.
Because of our proven and true global thematic approach, LCM is suitably and uniquely positioned to consistently capitalize on investment opportunities as a whole–both on emerging themes and their effects on countries and economies across all geographies.
LCM’s thematic equity investment process is comprised of four distinctive steps:
1. Identify broad structural changes that will fundamentally alter the structure of economies and industries;
2. Analyze the impact of socio, economic, political and technological factors and attain a solid understanding of the implication derived from the convergence of such forces;
3. Develop investment themes that single out industries that will be positively impacted by the changes; and
4. Identify and invest in companies within such industry sectors best positioned to capitalize on such changes.
As we understand the importance of discovering and maximizing new global investment opportunities while being mindful of risk, LCM’s successful track record provides our clients with an indisputable proof of our wealth management capabilities and strict adherence to a rigorous investment discipline.
LCM’s invests globally in publicly traded stocks. Traditionally, our portfolios consist of of individual securities purchased directly on foreign or domestic exchanges. Portfolios might be 100% allocated to U.S. equities, 100% invested in foreign equities, or potentially 100% invested in money market instruments. In addition, we may elect to hold any combination of currencies, commodities, global fixed income and global equities.
Client portfolios are designed around very tightly focused themes, are style agnostic and seek to generate absolute return while preserving capital. We recognize that significant and profitable investment themes are not a frequent recurrence. Consequently, we draw on the superior quantitative, global fundamental research capabilities and macro-economic insight of our team to attain a rapid and exhaustive understanding of emerging trends and their potential to yield rewarding opportunities.
Levitt Capital Management, LLC portfolios do not use benchmarks to evaluate performance.