We strive to be conscientious stewards of the capital our clients have entrusted us to manage. Fundamental research is the foundation of all our investment decisions. Our style cannot be described as either value or growth. Our objective is to invest, at fair prices, in well managed businesses that enjoy sustainable competitive advantages and which will grow earnings and cash flows at above average rates over time. Investment rewards can only be achieved by taking intelligent risks, which we seek to fully understand and manage to achieve superior risk-adjusted performance over the longer term.

As conscientious stewards of our clients’ capital, we seek to attain rewards with managed risk.


We believe that consistently superior longer-term investment performance can only be generated by rigorous and disciplined independent research and analysis of an extensive variety of investment opportunities. This basis of fundamental research is the foundation of all our investment decisions.

We are long term investors in companies we expect to compound in value over the next three to five years. We understand that creating value takes time and do not chase quarter-to-quarter results. Our track record proves that disciplined, active, long-term investing is the best way to deliver consistent, dependable returns for clients. Against this background we apply the client-centric principles on which Eau Rouge is founded to develop innovative investment solutions delivering longer-term value.

We adopt a two-pronged approach to investment management, combining a top-down methodology with bottom-up stock selection to encapsulate the best investment ideas from the entire spectrum of asset classes available to us, such as equities, bonds and cash. Our analysis of economies, markets and companies also guides us to investment themes in the equity market which may prompt us to research selected industries more exhaustively for potential stock opportunities. Our stock selection is premised on the philosophy that sound fundamentals drive stock prices over the longer term. From our strong base of third party research and our own fundamental analysis, we make long-term investments in well managed businesses that enjoy sustainable competitive advantages in their industries and which we believe will grow earnings and cash flows at above average rates over time. We add value with active management, which we define as rigorous and ongoing scrutiny at the company level to gain the confidence needed to invest independently of benchmarks, not portfolio trading. We focus both on existing blue chip companies and on identifying smaller companies that have the potential to develop into the blue chips of tomorrow.

Our investment style cannot be defined as either value or growth. We believe each of these style biases has inherent shortcomings. Value managers tend to be contrarians, buying stocks they believe are trading significantly below their intrinsic valuations even if share price momentum at the time is negative. This leads to their performance typically being concentrated in relatively short periods of spectacular returns when that momentum reverses, interspersed by usually longer periods of apparent disappointment. On the other hand, strong share price and earnings momentum tend to be hallmarks of growth managers’ stock selections. As a result growth managers enjoy periods of spectacular returns, but all too often these returns are sadly diminished over the longer term by other periods of massive under performance after trends reverse.

We believe our clients are better served by a style which can deliver superior risk-adjusted returns in most market conditions. We therefore look for high quality companies with improving operating performance and above-average growth and/or returns, that are receiving increasing investor attention and whose prospects are not yet reflected in their valuation. This can best be described as “growth at a reasonable price”. In essence, it comes down to assessing and reassessing acknowledged market leaders and seeking out the growth shares of tomorrow, recognising that high ratings are vulnerable to derating if growth disappoints. Per contra, low ratings normally mean poor businesses, so ratings stay low.

We realise that investment rewards cannot be achieved without taking intelligent risks. We seek to mitigate risk by fully understanding the risks inherent in each investment opportunity, and proactively measuring these risks on an ongoing basis, looking for the tell-tale signs of a deteriorating investment case. We also manage the risk at a portfolio level to achieve superior risk-adjusted performance.

A key vulnerability of our style is a reluctance to sell quality investments once prices fully reflect their economic worth. We recognise this and guard against it with strict sell discipline, consistently challenging each holding’s investment case.

Against this background, we are responsive to our clients’ needs. Institutional clients’ return targets and risk tolerance levels determine the final asset allocation and portfolio construction. Balance is, of course, a key component of risk management.