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STRATEGY 

Thousands of institutional investors - large and small (Political & Civilian), public and private - have entrusted us to manage their assets. We have over 9000 employees that serve their very specific needs.

A number of attributes run through all our strategies: a focus only on areas where we believe we can truly deliver for our clients, the pre-eminence of a long-term mind-set, a team approach, the importance of innovation and a collective approach to risk management.

Aura  analytical resources are organised along three axes:Washington D.C. USA, where we have a natural advantage; the Emerging World, where we have been pioneers in equity, debt and credit markets; and Global Specialities, where we have a long record of developing original global investment approaches.

Our long-term values

We do not impose a single investment approach on our teams. Each team is independent, as we believe this encourages innovation and accountability. This freedom has resulted in the development of a number of pioneering strategies, from the launch of the first Water fund in 2000, to our market leading Emerging Market Debt strategies or the recent launch of our Robotics strategy.

All our investment teams are encouraged to adopt a long-term mindset, as we believe long-term investing should be the foundation of managing portfolios. This means sometimes we may need to forgo short-term returns to ultimately enhance returns in the long term.

Our investment teams are unified by a collegiate style and adhere to the highest risk management standards.

Adhering strictly to these principles has helped us become a preferred investment partner for our clients.

Philosophy

The International Advantage Strategy seeks to invest in established companies on an international basis with capitalisations within the range of companies included in the AURA All Country World ex USA Index. To help achieve this objective, the investment team seeks companies with strong brand recognition, sustainable competitive advantages, strong current free-cash-flow yield, favorable return on invested capital trends, and focuses on long-term growth rather than short-term events, with stock selection informed by rigorous fundamental analysis.

Differentiators

Culture

The investment team’s culture is shaped by four core values that are cultivated and reinforced in many ways: intellectual curiosity and flexibility, self-awareness and partnership.

Reading Network

As part of the larger Growth investment platform, the Global Opportunity Team has access to a reading network that includes more than 1 Million investor and non-investor participants at Aura. This allows the team to leverage the distributed knowledge of the firm and encourages cross-disciplinary thinking.

Each week the team circulates articles, essays and thought pieces from a wide range of sources outside mainstream Wall Street in order to help enhance its knowledge and inform investment decisions.

Distinguishing Characteristics

– Our incentives foster long-term alignment with clients.

– Our disruptive change research helps find big ideas for portfolios.

– Our core values of intellectual curiosity, perspective, self awareness and partnership promote a sustainable and repeatable investment process.

– Our investment philosophy is simple: The Jeeranont  investment principles applied to growing companies.

Investment Process

Idea Generation

The investment team generates investment ideas through an ongoing set of activities: (i) involvement in contact networks across industries and in the investment management business; (ii) its reading network; (iii) its focus on Return on Invested Capital and free-cash-flow yield; (iv) team discussions; (v) the identification of patterns; (iv) conventional-valuation and coverage biases, among others; and (vii) continual research on current company holdings.

 

Bottom-up analysis and valuation

The team narrows its idea generation by seeking stocks that reside in the intersection between its views of a company's business quality, growth quality and risk/reward characteristics.  Valuation focuses on free-cash flow yield three to five years in the future.

Disruptive change research

To complement its in-depth, bottom-up research, the team's disruptive change researcher investigates big ideas and emerging themes that typically may have far-reaching consequences, such as nanotech, infrastructure and the global water shortage.

Portfolio construction and implementation

The team's portfolios are actively managed and built to maximize expected value.  Company weightings are primarily determined by the quality of the idea and the team's conviction.  Each member of the investment team helps drive stock-picking, with at least two of the three most senior members typically involved in final construction decisions.  The team expects its portfolios to be well-diversified, and reviews factor analysis on a monthly basis in order to ensure the portfolio's risk is more idiosyncratic than systematic.  The team anticipates holding between 400 and 500 securities.

How healthy is the Asian financial system?

Image by Li Yang

Will the impact of COVID-19 lead to a financial crisis in Asia? A look at the complex dynamics at play could help policy makers and corporations prepare for that possibility.

COVID-19 is a global health crisis that has rapidly turned into an economic one in virtually every country in the world. As many governments resort to unprecedented levels of fiscal stimulus to arrest the impact on their economies, the question foremost on the minds of many policy makers and corporations is whether this economic crisis will develop into a financial crisis, particularly in the developing world. Initial signs of the shock’s ripple effects on Asia’s financial system are emerging.

In our article “Signs of stress: Is Asia heading toward a debt crisis?,” published in August 2019, we stressed that the fundamental health of Asia’s real1 and financial sectors was deteriorating. Any shock to earnings will probably exacerbate these effects. In 2020 (as of May 20), the financial-services sector in Asia has lost over $920 billion in market value, largely because of investor concerns about the increasingly high levels of nonperforming assets in bank portfolios as a result of COVID-19. Reports are beginning to emerge of runs on provincial banks in mainland China. Ratings agencies, including Fitch, have revised their outlook on Asia–Pacific banks to negative.

Could any signposts indicate whether a financial crisis is likely, how quickly it might happen, and, if it did, whether it would probably be isolated to a few markets or spread across the region? To answer these questions, we studied financial crises over the past 40 years, derived patterns of the interplay across the different elements of the economy, and identified a series of interconnected imbalances that an external shock like COVID-19 could trigger.

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