INVESTMENT PHILOSOPHY

Our Approach

It doesn’t matter how large or small, we believe every fortune has a story. We respect that story and focus on strategies to assist our clients to manage their portfolios to preserve their wealth, and to generate income and capital growth. Our investment philosophy is to surround our clients with a focused investment management team who understand their needs, aligns their interests, and invests them in the best opportunities.

ASSET ALLOCATION

Asset allocation is an essential risk management strategy and the optimal way to manage market volatility and protect against the unknown while preserving capital over the long term…because the bull market never ends, it just changes asset classes.

Our long-term investment approach focuses on capital preservation and absolute wealth accumulation via:

  • Minimising the risk of permanent capital loss
  • Generating appropriate net returns
  • Appropriate diversification across asset classes
  • Valuing liquidity

Investment Process – taking full advantage of wealth creation activities and opportunities

Markets are cyclical in nature, so we take an active approach to Asset Allocation and Portfolio Management via analysis, review and rebalancing. By nimbly adjusting portfolios to changing market conditions and client preferences, structures and goals, we proactively manage risk and identify the most suitable investment opportunities. This awareness is an outstanding value creation process in all the asset classes.

Implementation – client needs drive investment instrument selection

We are flexible in the financial instruments utilised to implement a client’s investment strategy. The instrument selection is driven by the client’s portfolio requirements. Typically a combination of direct holdings in Large Cap Equities, Unlisted Property Trusts and Alternatives; utilising external managers for specialised allocations – Early Stage Venture Capital, Domestic & Global Small Cap Equity exposure and Emerging Markets. This may be implemented through managed funds, listed investment companies (LICs) or Exchange Traded funds (ETFs).

Tailored Equity Portfolio

The KPW direct Australian and International equity portfolios are tailored to the individual client risk/return profile, typically consisting of 15-20 companies. We believe our approach on focusing on quality businesses rather than markets, is conservative and repeatable and will deliver superior, long-term outcomes to clients

Contact us to obtain further information about our Direct Australian and International Equity Portfolios and their performances.

Why Direct Large Cap Equities

We believe clients will be rewarded over the long term by having a core direct equity holdings as part of their portfolio construction. This is particularly relevant when considering the large cap allocation in a client’s portfolio.

This provides:

Flexibility – direct investments allow investors to buy, sell, add or trim to specific investment as needs or opportunities arise, much faster than structures and in smaller or larger units to meet liquidity requirements. It provides client control and management of their financial situation – with respect to franking credits, discounted capital gains and offsetting realised losses and gains.

Risk Management – having direct line of sight of the company you are invested in rather than an opaque structure allows the adviser and investor to assess risk quickly. In times of market volatility, a portfolio risk and return profile can be materially amended to the investment conditions.

Stock Selection Process

The stock selection process is driven by the desire to invest in quality businesses, in good industries, strong management, companies with robust balance sheets at attractive valuations.

Research Access

We have access to high quality research from a range of providers – domestic and international across all asset classes. This access to research allows us to have a clear understanding of market expectations and where the risks are in company earnings and strategy execution by management.

Business Quality

A high-quality business has an identifiable and understandable ‘moat’ or set of competitive advantages. These competitive strengths can include superior product or service quality; an esteemed brand and reputation; a corporate culture that attracts and retains the best people; scale; distribution strength or proprietary technology.

Valuation

Valuation method can vary depending on the company industry sector and key attributes. Typically, a starting point based on standard valuation methods such as Discounted Cash Flow (DCF) and Sum of the Parts (SOTP).

Strong Management

Management experience, trustworthiness and competence are key. Management perform critical roles as custodians of the company franchise, culture and capital. We look at the longevity and turnover of key management positions; the track record of clear and transparent communication with the market and ensuring management are driving positive corporate culture.

Momentum

An anomaly of financial markets and companies is they tend to display momentum, positively and negatively. There are several reasons for this anomaly – but a key one is that humans tend to over extrapolate the current conditions – one year believing the bad times will last forever, and next the bull market will never end!

Our Portfolio Management Process

Let’s start a conversation about Asset Allocation today.

“Our client’s success drives ours”

OUR MISSION

Our DNA and culture is committed to our investment capabilities and client service.
We strive to:

  • provide superior financial asset management services so clients achieve their long-term financial goals
  • deliver independent, objective, tailored and creative investment strategies
  • build, preserve and transfer wealth whilst fostering an “investment community environment” delivering both better outcomes and access to opportunities otherwise not available

So our clients enjoy more capital growth and income with less volatility.

OUR VALUES

Respect for the Individual
Integrity
Accountability
Community
Social responsibility