Playing the plan: Mawer's equity philosophy in action | Christian Deckart | EP07

May 23, 2018 Print

Deputy CIO, Christian Deckart, takes listeners on a journey through Mawer’s equity investment philosophy by walking through the investment thesis of four of the firm’s global small cap strategy’s top ten holdings: Softcat, Tsuruha, XP Power, and VZ Holding.

Highlights include:

  • idea generation behind the stock purchase
  • investment theses
  • competitive advantages
  • risks

 



Your host

cam porthole3 Cameron Webster, CFA, MBA
Institutional Portfolio Manager

Cam likes to think and act long-term. He has broad experience in the capital markets over his 20+ years as an analyst, portfolio manager, and client service professional. When not thinking about markets and investing, Cam trains and participates in other “boring” and disciplined activities such as ultra-endurance races—marathon, triathlon, one-day 300+km bike rides.

Shownotes

Start – 1:04

2:06 – Overview of Mawer’s equity investment philosophy:

  • Wealth-creating companies
  • Excellent management teams
  • Discount to intrinsic value

3:10 – Softcat: What the business does and our investment thesis

5:26 – The benefit of investing in a “capital light” company

6:24 – What it means when we say we look for companies that earn a return on capital greater than their cost of capital

7:04 – How the idea was generated within the Mawer team

10:02 – Softcat’s competitive advantage and what could go wrong

13:33 – What tool the team uses to evaluate management team answers: Scuttlebutt

15:08 – Island hopping to Japan: Tsuruha—what the business does and our investment thesis

16:27 – Is Tsuruha the “Shoppers Drug Mart” of Japan?

17:27 – How the idea was generated within the Mawer team

19:55 – Tsuruha main risks: regulation

20:56 – Tracking deeds—return on equity

22:08 – Back to the UK: XP Power—what the business does and our investment thesis

24:08 – Sustainable competitive advantages: keystone business model

26:41 – Over to Switzerland: VZ Holding—what the business does and our investment thesis

29:34 – Competitive advantages: culture, CEO as founder

30:55 – The toughest question we’re asking VZ Holding’s management team

32:00 – Rapid Fire Round

  • Small Cap or Large Cap and why
  • Favourite German expression 
  • One of the most insightful observations Christian has learned from his children

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