our strategy.
Through science-based analysis, and partnerships we have built with experts across numerous disciplines, we put our understanding of system change at the heart of our investment approach. Across our investment universe, we seek to understand how the deep-rooted transformations taking place in energy, industrial, consumer, health, and digital systems will impact business models and long-term profitability. Across these systems we believe opportunities are emerging where the market is mispricing the risks and opportunities created as Climate, Nature, and Social pain points force long-term system changes on today’s established economic model.
Having identified those businesses that we believe are set to benefit from the transition, we deploy fundamental analysis to search for price dislocations, where the commercial opportunity has been mis-priced by markets yet to wake up to the system changes happening beneath their feet.
While we always take a long-term approach, we are not targeting returns at an unspecified future date – but now. By over-layering systems change analysis with fundamental, bottom-up analysis, we build diversified, risk-managed, high-conviction global and thematic portfolios, founded not on hope or the changing winds of public policy, but on economic fundamentals.
We are living through a unique time
Today’s physical and social pain points are creating huge uncertainty. They are also creating unprecedented opportunity. In a tumultuous economic environment, system change analysis provides a means to ground investment outlooks in economic reality. Put simply, the world is changing, and investors must change with it. What worked yesterday will not work today.
We believe that sustainable investing is essential for preserving and growing our clients’ wealth over the long term. Away from the short-term noise and the latest ‘breaking news’, the tectonic plates of global systems change are shifting. As we transition to a net-zero, nature-positive, socially-constructive and digitally-enabled economic end-state, businesses and investors must take action, or risk missing a once-in-a-century economic revolution.
Decades of globalisation and economic growth have lifted more than one billion people out of extreme poverty12. Simultaneously, living standards in developed nations have risen and global life expectancy has been transformed, rising from 46 years in 1950, to 73 years today13.
While markets have long debated such shifts, we believe today’s system changes trends run deeper, and are set to put a strain on social systems that will force governments to rethink the social contract. In turn, this will create opportunities for forward-thinking businesses who will find ways to deliver personalised goods and services accessibly and at scale.
As our daily lives become less affordable, with growing healthcare and housing costs, and a pensions gap that could soon threaten the public purse, we believe that a market-led, socially-constructive economic model will emerge.
In our health system, we will move from ‘sick-care’ – where we treat symptoms after they have arisen – to personalised, preventative medicine. Advances in AI and data analysis will support real-time, unobtrusive monitoring of health factors such as blood pressure, heart rate and blood-sugar levels, raising warning flags at the earliest possible moment. Meanwhile, the plummeting cost of computing will enable widespread genetic screening for individual health risks and the preparation of personalised lifestyle and illness prevention plans, increasing ‘health-spans’ well into our later years.
Among myriad social changes, we anticipate greater internet connectivity will bring another one billion people on-line, democratising access to services and economic opportunity. Asset management and financial data will see strong growth as an expanding and increasingly active older generation puts more emphasis on private pensions. And across the board we will see a shift to personalisation, affordability and accessibility, as digital technologies enhance the consumer experience and expand access to those currently priced out of segments such as mobility and housing.