Latitude is an independent investment boutique set up in 2016. It manages a fundamental global equity strategy and a global absolute return strategy, with Stewardship at the core of the business.
Central to its investment philosophy is a rigorous process of fundamental research with ESG analysis fully integrated into its research. The research process includes meeting with company management, as well as analysis of publicly available information and proprietary and independent research.
At Latitude, we consider ourselves stewards of our clients’ capital. Stewardship serves as a powerful philosophy that is focused on what really matters to our clients: Absolute performance, sustainability and the delivery of enduring value.
Systemic problems exist in markets and Asset Owners and Asset Managers are well-placed to see problems and implement change. Stewardship is as much about responsible ownership as a considered approach to selecting investments.
As long-term investors we believe it is critical to take a holistic view of the underlying financial performance of an investment, the risk and the sustainability.
When we invest on behalf of our clients our core principles at Latitude are:
- We are long-term in our approach to managing money; As active managers we look for businesses that will deliver absolute performance and create enduring value. We aim to actively own, as opposed to trade, these companies
- We seek out and support exceptional senior management teams, but hold them to account where we have concerns. We believe that responsible companies will tend to create more durable economic value. Specifically, we favour businesses that articulate compelling long- term strategies, and take seriously their responsibilities to their customers, workforce, local communities, the environment and their shareholders.
- We are not preoccupied with short-term market movements, but look at underlying fundamentals, financial performance and sustainability. Environmental and social factors also play a material role in determining risk and return. These are considered alongside other value drivers in determining a company’s ‘investment case’ or ‘associated risks to investment”. We believe that companies’ long-term success depends on strategies that sustainably deliver goods and services, such that companies earn an attractive return on investment, maintain their license to operate and deliver improving and durable returns to shareholders.
Our core investment principles guide our approach to investment and stewardship, but we avoid hard and fast rules in implementation, preferring a pragmatic approach. We also believe that ourclients’ long-term interests are not best served by a narrow focus on relative performance against a market index. Performance goes beyond beating a benchmark: positive absolute performance achieved by the market as a whole is what really matters.
A key Stewardship policy at Latitude is the use of leverage, short selling and derivatives. These more risky portfolio management techniques were a significant factor in causing the global financial crisis in 2008 and have no place in our portfolios. There is also little alignment of interest between investment managers and clients. Managers are incentivised to maximise AUM. As Stewards of our clients capital we believe portfolio managers should focus on generating added value at a reasonable cost to their end investors.