Artisan Global Value Fund | Why Artisan for Global Value?
- 1 day ago
- 6 min read
Ryan Wood from Artisan Partners provides a brief overview of the Artisan Global Value Fund. Chapter breakdown and full transcript below.
Chapters:
0:00 Introduction
0:19 Investment Philosophy
1:06 Investment Process
2:29 Portfolio Positioning
3:22 Investment Team and Research Approach
6:23 Artisan and Copia Partnership
Transcript:
00:00 Introduction
My name is Ryan Wood. I work for Artisan Partners, specifically representing our Artisan's Global Value Team. I am a product specialist, client portfolio manager, solely representing the Artisan Global Value team and the strategies that we manage.
00:19 Investment Philosophy
What we are focused on doing is buying high-quality businesses at a discount to their cash flow-derived intrinsic value. We're looking for businesses that are mispriced but can also compound their value over time. This is not deep value, you know, we are differentiated from more traditional approaches to value.
We're focusing on finding that combination of attractive valuation with high quality businesses that also have strong balance sheets, durable cash flows, great management teams. We want to align ourselves with management teams who think like we do as owners of a business. And so that ideally, you know, we're owning businesses that are compounding their per share value over time, but are mispriced for one reason or another.
That's in order to avoid value traps where there's a business that might appear statistically cheap, but there's good reason.
01:06 Investment Process
In terms of how we invest, we are very much bottom-up research-driven fundamental investors. This is a collection of 35 to 40 idiosyncratic ideas at any given time. We have an ownership mentality. We're seeking to own businesses for a significant period of time.
And in trying to own businesses that at that absolute framework or mindset, what we're looking for is that 25% discount to cash flow derived intrinsic value. We don't pay attention to the benchmark. we don't pay attention to the broader market, we don't think about overweight, underweight certain sectors or industries. We are simply seeking alpha generation. This is a high active share strategy that's going to look and behave very different than the broader market or then the benchmark. We have a very straightforward and repeatable investment process.
It's simple. Just because it's simple doesn't mean it's easy to execute, but it means that it is ultimately repeatable, which is extraordinarily important in our opinion. We've put together a pretty successful long-term track record through multiple market cycles. We've proven our ability to compound capital at an attractive rate of return over time, which is ultimately what we are most focused on doing. We're not worried about what the broader market does. What we are worried about is compounding capital at an absolutely attractive rate so that ultimately we're putting more food on our clients' tables next year than last year, and ultimately on our own table because we're invested right alongside of our clients.
02:29 Portfolio Positioning
I think in terms of a role for this strategy, for this portfolio, it can serve as a core global equity holding. We certainly have clients who do that, just given the focus on quality characteristics and financial strength. We also could serve as a complement to growth-heavy portfolios, given our focus on valuation and being price sensitive and wanting to own businesses at a discount to what they're worth.
You know, this is a highly disciplined, time-tested, patient value approach. We're emphasizing business quality. You know, we have the flexibility to go anywhere in the globe to express ideas wherever we might find them. It's high conviction. Again, we're concentrating capital. We do an extraordinary amount of fundamental research. We know our businesses extremely well. And so it's a concentrated, high-conviction portfolio as well, designed to deliver consistent long-term outperformance, hopefully, with keen risk awareness.
03:22 Investment Team and Research Approach
The global value investment team, there are you know some important things to understand. I think first and foremost, locationally, the team is based in Chicago and San Francisco, are our primary offices. We have had the same leadership since day one of the strategy, which incepted in the summer of 2007. Dan O'Keeffe has always been the lead and singular decision maker on the strategy for the last almost 20 years now. Mike McKinnon is his co-portfolio manager.
The two of them have worked together for 16 years now. Mike joined the firm, the team, in 2010 as an analyst and worked his way up the ranks to where he now sits as a partner in the business alongside of Dan, very closely involved in portfolio construction, the research process. Ultimately, all final decisions on the portfolio are Dan O'Keeffe's, but Mike McKinnon is very closely involved. And I just think it's important to appreciate the continuity among the most senior members of the team. In terms of how the team is structured, why we're structured that way, there's three points I think are important to understand. First is that we have a very flat structure. And what I mean by that is that everyone on the team are first and foremost research analysts when it comes to their day-to-day responsibilities. They spend 90 plus percent of their time digging into companies, digging into financials, meeting with management teams, researching businesses. We don't have research associates.
We have a highly collaborative approach. We like to say there is a co-learning process that takes place from idea generation when something first appears interesting until it's ultimately bought in the portfolio. Dan and Mike are sitting down with the analysts every single week in a research workshop type of setting to review their work lists. Oftentimes they're going through the same earnings transcripts, 10K's historical financials, sitting in on calls with the management team. That might not necessarily sound efficient. It's not designed to be efficient.
It's designed to facilitate a more robust investment conversation and make sure ultimately that we're right more often than we're wrong. Second point is that it's a very small team. That is very much by design. We believe in simplicity, we believe in clear lines of communication. That small team helps facilitate that collaborative approach. It also allows them, our most senior investment talent, Dan O'Keefe, Mike McKinnon, to spend most of their time doing research, less time managing people, more time researching companies, studying businesses.
And then third, finally, with respect to our research coverage, everyone is a generalist. We want to avoid ultimately that person with a hammer syndrome, where if you have an analyst, in our opinion, who only looks at one sector industry vertical, your job becomes rank ordering. You're always going to see that relatively attractive stock versus that basket of competitors or that sector vertical. But instead, again, we want to have a system of well-rounded investors who can look across different types of business models and identify business quality and balance sheet strength and ultimately value different types of businesses. Those are the three points I think are important to understand about the team.
06:23 Artisan and Copia Partnership
Artisan has partnered with Copia now since 2020 in order to provide investors in Australia and New Zealand with access to Artisan's investment capabilities.
Both businesses bring more than 25 years of experience supporting sophisticated investors across a broad range of high-value added investment strategies. In 2024, Artisan and Copia deepened that relationship by launching an Australian domicile unit trust, Investing in Global Value. We're pleased to make this strategy available to a more broad range of investors here.
IMPORTANT INFORMATION
This video has been prepared by Copia Investment Partners Limited (AFSL 229316) (Copia) for general information purposes only. Copia is the issuer of the Artisan Global Value Fund (AGVF), an unregistered managed investment scheme available to wholesale clients only under an Information Memorandum (IM). The IM is available upon request to eligible wholesale investors. Interests in AGVF are not available to retail clients. The information contained in this video does not take into account the investment objectives, financial situation or particular needs of any person and is not intended to constitute financial product advice, investment advice, a recommendation or an offer or invitation to invest. Viewers should consider the appropriateness of the information having regard to their own objectives, financial situation and needs, and should seek professional advice before making any investment decision.
Any opinions, estimates, forecasts or recommendations contained in this video are subject to change without notice and may differ from subsequent views expressed by Copia or its related entities. Copia does not undertake any obligation to update the information contained in this video. While the information in this video has been prepared with reasonable care, neither Copia nor any of its related parties makes any representation or warranty as to the accuracy, completeness or reliability of the information. Past performance is not a reliable indicator of future performance. Total returns assume the reinvestment of all distributions. The performance is quoted net of all fees and expenses. The reference indices do not incur these costs. This information is provided for general comparative purposes. Positive returns, which the Funds are designed to provide, are different regarding risk and investment profile to index returns.
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