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Our investment strategies are guided by a three-part philosophy that is simple yet powerful.

  1. Capital preservation 
    Our main objective is to protect the capital invested by our clients.
     

  2. Capital growth 
    Our second objective is to gradually increase that amount in line with our investment approach.
     

  3. Quality returns 
    Our third objective is to generate quality risk-adjusted returns while remaining true to our investment discipline.

Security Selection
Equity Strategies

As long-term fundamental investors we combine extensive in-house company research as part of a bottom-up investment approach using specific security selection drivers to help us invest in strong companies. We base our security selection on four underlying drivers that make up the core of our investment strategy.

 

  1. Attractive and understandable business model
    Initially, Louisbourg investment managers are drawn to companies with solid business fundamentals. We invest for the long term and view a holding in a company as a partial ownership interest in a business, not a short-term trade.
     

  2. Solid balance sheet
    ​    Our managers invest in companies with solid balance sheets, where the company spends its time executing its business plan and not worrying about its financial situation.
     

  3. Strong operational outlook
    Our managers invest in companies where the industry tailwinds are strong and the company’s relative industry positioning is improving. Being aware of the negative impact of earnings surprises and revisions, we seek positive operating momentum.
     

  4. Compelling valuation
    Share price appreciation ultimately comes from two factors: earnings/cash flow growth and valuation multiple expansion. Our managers invest in companies where industry, company specific events or current valuation (vs. peers or historical) makes valuation multiple expansion a higher probability event than multiple compression.

Security Selection
Fixed Income Strategies

We take an active approach with the purpose of generating added value returns, utilizing a combination of top down and bottom up analysis to determine sector weights, interest rate-based positioning and security selection. Sector weightings and government bond positioning provide an added generator of total return, focusing on economic forecasting and the risk adjusted value represented by each sector.

 

The management of corporate bonds is also a key driver for value added return with security selection driven by:

  • Company fundamentals;

  • Credit risk;

  • Relative value analysis with a focus on risk-adjusted returns.
     

To evaluate these securities, we undertake an in-depth analysis, applying fundamental and credit risk analysis combined with relative value, industry and macro views. Our fundamental analysis focuses on:

  • Industry factors and structure;

  • Firm’s competitiveness;

  • Operating strategy;

  • Strength of the management team and their vision for the firm.


Our credit risk analysis examines the following factors:

  • Degree of financial leverage;

  • Stability of bank credit facilities;

  • Overall liquidity and operating performance of the entity;

  • Default risk and potential credit downgrade risk.


We actively scan the market for strategic positioning opportunities, taking smaller bets but being more active in realizing on value added opportunities. Our corporate bond strategy is limited to investment grade issuers of BBB (low) and above. We have an aversion to high risk positioning with a focus on preservation of capital and diversification.

 

Bond pricing must adequately compensate investors for all risk factors prior to purchase. We maintain a high risk/reward threshold discipline throughout the cycle.

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