The THB International Opportunities strategy seeks long term capital appreciation over full market cycles through creation of a focused portfolio of high-quality securities from 22 of the 23 developed markets. Our investable universe is over 5,000 securities including constituents from the MSCI World ex USA Small and Micro Cap indices. Our strategy will hold approximately 150 securities and have a high active share.
Philosophy & Process:
THB believes that international small cap companies are very inefficient, and that a focused portfolio of high-quality securities can offer strong risk-adjusted returns.
Our portfolio typically holds 150 securities from the approximately 5,000 securities within the investable international small cap universe (22 of 23 developed markets – ex US) and will have a high active share.
We focus on finding companies that have demonstrated a long-term track record of success as measured by their ability to achieve self-funded growth. THB believes growth in revenue, shareholder equity and cash flow should not be achieved at the expense of rising levels of shares outstanding and/or debt.
Stocks must first pass THB’s stringent rejection criteria before being considered for the portfolio. THB’s proprietary Risk Grading and Quality Assessment, company-specific debt levels, retained earnings and earnings consistency are all factors that are used to reject less qualified securities.
We employ a core-based approach and seek out undervalued/ mispriced securities. We do not only consider absolute levels of valuation but also look for opportunities in which the discount to intrinsic value is high enough to compensate for risk associated with the investment.
Our investment philosophy and process, with refinements such as full integration of ESG (Environment, Social and Governance) factors, has remained intact throughout the team's existence.