Below is Yasmine Masi’s Financial Newswire article ‘Don’t miss the forest for the trees′ which was originally published in the Financial Newswire on 30 June 2022. For the original article on the Financial Newswire website, please click here.
“Don’t miss the forest for the trees”
This proverbial take on funds management comes from Anshu Sharma, Portfolio Manager for the Loftus Peak Global Disruption Fund along with firm CIO Alex Pollak, who have been named one of Financial Newswire’s Star Managers for 2022.
It not only represents part of the fund’s investment strategy, but also part of Sharma’s approach and attitude as a portfolio manager, which – he says – is very much interchangeable.
“It’s a whole journey… portfolios at times are actually a depiction of the mindset of the portfolio manager. A lot of the time, when I look at the portfolio, I feel this is my representation of how we can generate returns based on our understanding of the present world.
“The part I like is the numeric representation of the mindset. That’s what portfolio management is about. I feel each portfolio manager has a different style, and it’s important for each portfolio manager to realise what their style is and build portfolio aspects as per that.”
Sharma kicked off his career in funds management as an Investment Analyst of Global Technology at TechInvest in 2008, after short stints at Macquarie and Suncorp, which was followed by Portfolio Manager and Technology and Internet – Asia Investment Analysis roles at Eight Investment Partners.
Then in 2014, after meeting his fellow co-founder and their “understanding of the world just matched”, Sharma and Pollak launched Loftus Peak.
With disruption at its core, the fund and its managers at the helm seek to resist the “myopic” view of the market, taking a three-pronged approach to understanding the bigger picture: how the world is changing, what companies are doing now and their connection to the world of tomorrow.
“The first step for us comes down to understanding how the market is valuing our companies two to five years from now,” Sharma said.
“The second step [considers] our own views on the market and whether there is a disconnect. It’s extremely important how we value that disconnect. All investors should have a disciplined valuation mechanism.
“The third part is understanding that you’re trying to forecast how things would look two to five years from now. What are the risks? How can you manage that risk? And that’s where portfolio construction comes in… We allocate much more capital to things happening right now – businesses are there, balance sheets are there, the cash flows are there, and the profit is there.”
Loftus Peak’s strategy takes investors on a multi-decade journey of disruption, something that Sharma says requires perseverance and determination from its portfolio managers.
“Have a career in funds management [only] if you love the markets. It’s not a 9 to 5 job – it’s always on.
“This is more about persistence and understanding there are going to be periods of self-doubts about your strategies. Your valuations would be the crucial anchoring point, which will be consistently challenged.”
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