MONTANARO UK INCOME

Investment Process

The managers run an active bottom-up investment process with a focus on finding quality growth companies. These are firms who are market leaders with pricing power, a strong market position, high operating margins, and good management teams. They also need to be able to generate an attractive and sustainable cash flow, which will ultimately fund long-term dividend and capital growth. The team generates their own investment ideas by running proprietary screens, looking at growth themes and analysing a company’s quality, its finances including return on equity, and ESG credentials. They place a huge value on meeting management face-to-face. The ideas are then fed into a pan-European approved list and pitched to the Investment Committee. If approved, the companies are placed on the ‘quality approved list’. After finding these good businesses, the managers then ask themselves whether they will also make a good investment. They look at a company’s valuation including free cash flow and dividend yield, its intrinsic value, and risks such as dividend safety.