Thinking like a business owner

The recent global backlash to the UK government’s tax-cutting plans – along with geopolitical uncertainty, energy security concerns in Europe and ongoing tension between inflation and interest rates – has added significantly to this year’s equity market volatility.

It is natural that macroeconomic noise dominates at present, however as active global equity investors who think like long-term business owners, we continue to look ahead and focus on the heroes of our portfolios – our companies.

More than just the numbers

When considering a company’s capital, we look not only at traditional financial reporting, but also at the extra-financial factors giving great companies a competitive advantage.

Although such accounting does a good job of listing a company’s assets and liabilities on its balance sheet, it is just one form of capital: financial capital. Other forms of capital exist, such as human and environmental. Few would want to invest in a company with poor human capital, yet financial reporting does not reflect that data. And to take the example further, in the wake of the pandemic, companies willing to optimise flexible ways of working will be able to create satisfied personnel… or to put it another way, engaged, motivated human capital.

Read the full ‘Sponsored Commentary’ now at the link below

Supporting documents

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