Perhaps a proper thing to begin with would be to explain what we are not. We are not passive investors who think that valuations capture accurately the future prospects of companies. We don’t believe in blindly following momentum herd or slavishly adhering to what AI algorithm indicates as a right asset to buy —though we do acknowledge that those who completely ignore momentum-chasing algos do so at their own peril. We don’t believe that investment decisions can be made on numbers alone, even by super computers and complex machine learning algorithms. Passive has its place, providing low-cost market access with, on average, better after fees results than active managers.

However, it has little to do with the process of allocating capital to innovative companies – though on that point it has much in common with many active managers. We are not a run-of-the-mill active manager either – we believe this term has become a one-size-fits-all T-shirt that is very unhelpful to investors. It has been hijacked by many fund managers who think it suggests ‘activity’ and simply being different from an index. The reality is that much of this activity has more to do with trying to outsmart other investors than with the creative deployment of capital, and that defining active as being different from an index is to start in the wrong place. Many of those declare themselves firmly in the camp of Value investing or— more popular these days —Growth investing and stay in that tent regardless of evolving market conditions.

This is why most active investors fail to deliver returns that outperform passive investment strategies over the long term. They’re not even trying to do the fundamental job of investing. Some perceive the collective failure of active management as an argument to embrace passive. We see it as an opportunity to redefine our original purpose of deploying clients’ capital into tangible, return-generating activities. And we believe that redefinition is ‘actual investment’