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Investment Style & Process
INVESTMENT STYLE & PHILOSOPHY
White Funds Management seeks to invest in entities whose realistically achievable future earnings are capable of delivering a sufficiently robust rate of return to an investor with moderate certainty. Our methodology is designed to produce a positive outcome or relative outperformance in most economic conditions. White Funds Management’s investment processes have a clear focus on the achievable future earnings of a company or entity and the value of those earnings to investors.
Our investment process is style neutral and recognises that no individual share trait (such as growth, value or cash flow quality) can predict the ultimate return to an investor. Instead we emphasise the premise that investment return is primarily dictated by the net earnings that an entity is realistically capable of generating over future years relative to the price that must be paid for the investment.
Important corollaries that flow from the central tenet of our investment philosophy are:
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Differences that arise between the earnings that a company actually delivers or is realistically likely to generate over future years and the earnings initially anticipated by the market and which were implied or factored into the price paid for an investment will be a fundamental contributor to investment return.
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Relative valuation methodologies such as earnings or cash flow multiples are imprecise measures of value, which do not accurately account for the specific timing or quantum of future earnings and cash flows which may be generated by an entity.
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The price that must be paid for an investment will also be moved in the short term by factors extraneous to an assessment of inherent long term value, including the volume of buyers and sellers, and market perceptions of risk and opportunity.
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