Loomis Sayles

Global Growth Equity

Actively managed with a long-term approach, investing in businesses as partners

The philosophy

The Loomis Sayles Growth Equity Strategies (GES) team takes a long-term private equity-oriented approach by partnering with management who think and act like owners. It seeks to invest in high-quality businesses with sustainable competitive advantages and profitable growth when they trade at a significant discount to intrinsic value.

Quality

Identify high-quality businesses with sustainable competitive advantages and difficult-to-replace business models with drivers such as network effect, low cost advantage, strong brand awareness, or high switching costs

Growth

Find businesses with sustainable, profitable growth that are best-positioned to benefit from lond-term secular and structural growth drivers

Valuation

Buy these companies when they trade at significant discounts to intrinsic value

Businesses with all three of these characteristics are rare; therefore we concentrate our strategy in high-conviction ideas

Reasons to consider

The strategy is actively managed with a long-term, private equity approach to investing. Because the GES team approaches investing as if buying into a private business, a long investment horizon is central to their philosophy. This affords the team the opportunity to capture and compound secular growth as well as capitalize on stock mispricings created by reflexive responses such as herd mentality to short-term variables that have no impact on long-term value.

With a focused, low-turnover portfolio of 30-45 holdings, the GES team is able to develop a deep understanding of each investment through its bottom-up, proprietary seven-step research process. In part because the GES team focuses on fewer companies and makes even fewer investment decisions, the team believes it enjoys an analytical edge.

The team’s proprietary research framework represents the GES team’s long-standing insights about investing and is structured around three key criteria: quality, growth, and valuation. A patient investor, all aspects of the GES team’s quality-growth-valuation investment thesis must be present simultaneously when making an investment.

The GES team takes a long-term, structural and permanent approach to risk management because market volatility is inevitable but unpredictable. Therefore, risk management is an integral part of the investment process, not a separate overlay or optimization process. Diversification can be derived by investing in a portfolio of 30-45 companies with different business drivers.

“We are long-term, patient investors. We strategically allocate capital to select high-quality businesses with sustainable and profitable growth, only when they trade at a significant discount to our estimate of intrinsic value.”

– Aziz V. Hamzaogullari, CFA

The analyses and opinions referenced herein represent the subjective views of the author(s) as referenced, are as of the date shown and are subject to change without prior notice.

Risks to consider

All investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided. There could be other differences across similar products in the same strategy. Investors should fully understand the risks and other relevant details associated with any investment prior to investing.