nvestment managers are often categorised as either value or growth specialists. Both approaches have merits and pitfalls.

The value investor assesses the worth of a company's assets and invests on the basis that the share price understates the total. In an efficient market, the real worth is soon recognised. But markets are not efficient. Cheap-looking assets have a tendency to get cheaper in deteriorating markets or under bad management.The growth investor assesses the worth of a company's expected future performance and invests on the basis that the share price understates the potential.

The risk here is over-optimism. If there is no other measurement criteria, the downside can be painful.

In practice, value and growth strategies need not be mutually exclusive. Different styles will suit different circumstances.What is important is to find prices that understate the potential, whether of value or growth, and to understand the means by which the broader investment community will come to share a positive perception.

Independent research lies at the heart of our operation. Our team of analysts enables us to combine a thorough understanding of macroeconomic trends with rigorous analysis of individual companies.

We begin company research with an analysis of products, markets and management. With strong products and markets most companies will flourish, but even good management will struggle without these.

We then look at the underlying financials. For example, if a company's cash generation does not match its profits, perhaps there is a reason which management is reluctant to share. If the taxman seems especially lenient, we ask why the profits presented to him are so much lower than those presented to investors.

We look for companies in transition, perhaps restructuring their business, shedding restrictive family interests or appointing new managers. Often the opportunity is hidden, with growth and value disguised by old baggage.

We aim to gather a full understanding by meeting management, seeing products, and going to visit companies where we can learn as much from their corporate culture as their activities.

Our short lines of communication enable us to act decisively, ahead of the pack.