Presenting the Seilern World Growth Fund
FOR PROFESSIONAL INVESTORS ONLY
In this fund in five, we talk to Michael and Marco to look at the fund from five angles and get their outlook for global growth going forward.
Asset class
1
2
Process
3
Differentiator
4
Team
5
Track record
IMPORTANT INFORMATION
With a track record dating back to 1996, Seilern World Growth Michael Faherty, Marco Lo Blanco, Akash Bhanot and members of Seilern’s 10-strong team of analysts and portfolio managers.
In terms of expectations for 2023, Faherty says the team has built-in growth expectations of between 7-8% for all the Seilern Universe companies.
NEXT
“There is a big gap between what the prices of the stocks were doing and what the businesses were doing themselves,” he says.
Describing 2022 as a difficult year for equities, Faherty notes that while the prices of Quality Growth stocks – collectively, ‘the Seilern Universe’ – fell approximately 30%, their earnings profile actually increased by 12%.
The Seilern World Growth fund is a Quality Growth portfolio focused on OECD-country companies of the highest quality, with proven track records, sound financials and highly predictable and sustainable future earnings growth.
In the search for growth process, the fund can only buy companies listed in OECD countries that satisfy the Quality Growth criteria and have a market capitalisation for inclusion is $3bn.
“This is our philosophy and one we stuck to through the good times and the bad, and it is how we have invested for over three decades at Seilern and for over 25 years in the fund specifically” he says.
Lo Blanco says some of these rules are responsible for identifying the risks with a business and protecting the fund against them while also helping the managers find sustainable growth.
Running a Quality Growth style, the Seilern Universe condenses down a universe of 58,000 listed companies, to 50-70 securities that constitute the portfolio’s approved buy-list, which Lo Blanco says meet certain criteria called the 10 Golden Rules.
The final differentiator comes down to the fund’s process. “Process helps us the reduce the risk of style drift over time,” Faherty says. “Being process-driven means we have a very collaborative team approach to investing, which is built on fundamental deep research, low turnover portfolios, and adhering to our 10 Golden Rules to ensure our businesses remain intact and we can sail through different market environments.”
Another key differentiator, adds Lo Blanco, is the independence of the business, which is entirely owned by the founding family and the employees. “Essentially all of the employees of the business become partners over a certain amount of time, which is a methodology used to align the interests of us, as managers and research analysts, with our clients’ interests and the underlying growth of their capital,” he says.
Investing in 17-25 companies, Faherty adds that a second key differentiator is the concentration of the portfolio. “The risk of permanent loss of capital is best contained by knowing a lot about a very small number of securities,” he says.
Established as a firm in 1989, Lo Blanco says the longevity of Seilern is one of its key differentiators to its peers, with the World Growth fund managed with the exact same philosophy since its launch in 1996.
No investment strategy or risk management technique can guarantee returns or eliminate risks in any market environment. RWC Partners Limited is authorised and regulated by the Financial Conduct Authority.
Each analyst (all of whom are generalists) on the team covers a max of 8-10 companies, which Lo Blanco says means the fund is well-resourced to conduct the fundamental research which is needed for hunting Quality Growth assets.
Managing the fund are lead manager Michael Faherty, co-manager Marco Lo Blanco and analyst Akash Bhanot, who joined the firm in 2022.
Lo Blanco joined Seilern in 2018, prior to which he was an investment manager at Standard Life Aberdeen, having worked across Australian, Asian, and Pan-European equity markets.
“We have a team-based approach at Seilern and that has been the case forever,” says Lo Blanco. “It’s a very collaborative process. Everyone on the research team is both an analyst and a portfolio manager.”
£2BN
Assets under management
0.86%
OCF
IRISH UCITS
Structure
Faherty joined Seilern in 2016 and took over the World Growth fund in May 2018. Prior to that, he worked in the US Equity team at JP Morgan Asset Management and JP Morgan Chase as a graduate analyst
“Looking over the duration of the fund’s 26 year track record, the key contributor to performance of the respective teams who have managed it has been the sticking to of the Quality Growth process,” says Faherty.
Goals
HOME
Since launch in January 1996, the Seilern World Growth fund has achieved a compound annual growth rate (CAGR) of about 8%.
Michael Faherty, CFA, has been the lead fund manager of Seilern World Growth since May 2018. Marco Lo Blanco, CFA, became co-portfolio manager in May 2019. They were joined in 2022 by analyst Akash Bhanot.
In terms of individual names, he adds that a number of companies have been long stalwarts in the fund, with Mastercard held for over 10 years.
“Mastercard has generated an earnings CAGR of about 19% since its IPO and has been one of the key contributors to performance,” says Faherty.
