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Liontrust - Global Equity

The Global Equity Process

Investment Philosophy

The fund managers believe the key to generating long-term outperformance is through high conviction, long-term, research-led company selection. When combined with the team’s portfolio construction, this approach can drive returns that are largely uncorrelated to the successes and failures of popular investment styles such as growth (investing in growing companies) and value (holding relatively cheap companies).

Investment Process

There are three key elements to the investment process:

1. Collaborative Idea Generation: each member of the Liontrust Global Equity team has a research responsibility covering an industry sector of the global economy, a particular economic trend or a theme such as industries adopting new technology and changing consumer tastes. This clear division of responsibility ensures that the fund managers do not overlook “unfavoured” companies and allow structured peer challenge for the generation of validated, independent and sometimes atypical investment ideas that underpin the collaborative original research required.

2. Culture of Conviction: to enable ideas to drive investment returns rather than providing market returns, each one must be given sufficient weight in the portfolio and time to work. This results in concentrated portfolios with long holding periods.

3. “Three Silo” Portfolio Construction: portfolios are constructed to be “style-free” with the aim of providing more consistent returns over the economic cycle by ensuring that ideas drive returns rather than style bias.

The philosophy and process are implemented through four stages: idea generation, stock selection, portfolio construction, and monitoring and exiting.

Idea Generation

The Global Equity team seeks to identify excellent companies that are positively exposed to powerful trends that will result in consistently above market returns over the long term. The team’s collaborative research focuses on industry and economic trends that they believe will drive long-term value creation. The fund managers then identify those companies that will benefit from these trends and which have the basic characteristics of an excellent company using quantitative screening of fundamental financial data including revenue growth, profitability and cash flows.

This combined top-down and bottom-up approach allows the team to generate potential investment ideas across the whole market on a structured and consistent basis.

Stock Selection

An excellent idea does not automatically translate into long-term value creation. Companies identified during the idea generation stage may fail to execute its strategy, the shareholders may fail to benefit or the identified opportunity may already be priced in.

The Global Equity team subjects identified stock ideas to an in-depth evaluation of the opportunity and risk. This may involve building financial models to estimate the potential opportunity size and engaging with company management to understand execution risk – and therefore to understand whether the corporate strategy and management quality will mean the opportunity is achieved. Finally, the governance arrangements and other factors are considered to ensure that the returns will accrue to the shareholders.

Companies identified during this stage should possess a significant opportunity to create value, typically over a three-year time horizon, along with the management capability to execute.

Portfolio Construction

A portfolio of typically 20 to 40 stocks is constructed that is likely to differ substantially from the benchmark. The size of each holding in the portfolio is determined by the consideration of three factors: the size of each company’s value creation opportunity, its riskiness and the degree of diversification it offers to the existing portfolio.

Investments are assigned to one of three silos within the portfolio to help ensure that the fund managers minimise the risk of style bias. These silos represent structural growth investments, economic recovery investments and more tactical or special situation investments. The balance of the three silos is designed to help manage the risks posed by overreliance on any particular investment style and to ensure that the portfolio’s returns are driven by the investment ideas.

Monitoring and Exiting

Once an investment has been made, it is monitored on an ongoing basis against the investment thesis identified at the stock selection stage as well as against the three factors used to determine portfolio sizing listed above. This involves engagement with company management, evaluation of new information and updating of financial models.

Holdings are sold when they reach a valuation where further upside is not anticipated and the case for selling and investing in another company with greater return prospects is compelling. Another reason for selling a holding is when the stock does not perform as envisaged and events reveal a side to the investment rationale that was not anticipated. Where this negates the original investment thesis, the company is sold.

Global Equity Team
The Global Equity team
Robin Geffen (right) & James Dowey (left)

The Liontrust Global Equity team manages 19 active funds and has an average of 12 years’ investment experience between them. Led by Robin Geffen, who is the architect of the investment process, supported by James Dowey, the team manage a suite of actively managed funds in the form of global and specialised regional portfolios. The entire fund range is managed according to the same investment process, which is founded on collaborative idea generation, a culture of investing with conviction and three silo portfolio construction. The team transferred to Liontrust in October 2019 as part of the acquisition of Neptune Investment Management.

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Awards and ratings

Alpha Manager Mark Martin
Mark Martin
FE Alpha Manager 2020
Citywire - Fund Manager rated A
Ewan Thompson
Citywire Manager rating: A
Citywire - Fund Manager rated AA
Robin Geffen
Citywire Manager rating: AA
Citywire - Fund Manager rated A
Thomas Smith
Citywire Manager rating: A


Key Risks 

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. Investment in funds managed by the Global Equity (GE) team may involve investment in smaller companies - these stocks may be less liquid and the price swings greater than those in, for example, larger companies. Investment in funds managed by the GE team may involve foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The team may invest in emerging markets/soft currencies or in financial derivative instruments, both of which may have the effect of increasing volatility. Some of the funds managed by the GE team hold a concentrated portfolio of stocks, meaning that if the price of one of these stocks should move significantly, this may have a notable effect on the value of that portfolio.


The information and opinions provided should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing. 

Source: Financial Express. Total return, bid-to-bid. This page is showing performance data and information for an income producing share class. Please go to our Interactive Fund Centre for performance data and information on the Fund’s other share classes.

© 2020 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.  Past performance is no guarantee of future results.

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