We see investments as long-term ownerships of a selected and limited group of companies that we know and understand, and which we believe will create attractive, long-term returns.
Thinking like owners
As a consequence, we look at every company from the perspective of being an owner. The question we ask ourselves is whether we would own a particular company forever – not whether we think the share price is likely to increase in the short term.
We focus on companies that have shown a convincing ability to generate stable and growing cash flows from their daily operation. The primary focus of our investment strategy is the long-term ability of a company to create attractive and positive returns for the shareholders.
In order to identify the companies in which we want to invest, we constantly monitor a large number of companies. Annual reports are analyzed and evaluated on a multi-year basis, and we meet managements, analysts, competitors among others to increase our knowledge and capabilities of assessing the potential of interesting companies.
In addition to this, we cooperate with EIRIS, a leading global provider of independent research into the environmental, social, governance (ESG) and ethical performance of companies. Our portfolios are screened twice a year for adherence to UN Global Compact and UN Conventions. Consequently, we will be informed if there are issues that need attention.
While we in principle wish to be permanent co-owners of the companies in which we invest, we constantly re-evaluate our investment decisions. If the initial assessment changes or if other more attractive investment opportunities appear or quite simply, if share prices rise to a level where it would be prudent to sell, our ownership stakes can change or companies might be sold off completely.
Generally, we invest in 10 to 15 companies in our Danish portfolio, and 25 to 30 companies in our global portfolio.
Due to the focused strategy and in order to retain the freedom to invest in the small cap segment, we have a hard cap on our investment capacity in Danish Equities equal to DKK 3 billion and in our Global Equities funds equal to USD 3 billion.