Centaur’s investment philosophy is Dynamic Value Creation (DVC) which means a business must deliver minimum returns at its cost of equity via growth and capital returns over time. Of particular importance in our approach is business strategy, positioning, and the allocation of retained earnings.
Secondly, we try to find undervalued companies that are dynamically creating value. Excess arbitrage returns occur as the share price moves to fair value. This approach is illustrated in the diagram below where the return of a share of 14% per annum is geared up to 25% via this arbitrage effect.
Growth + Value
Proprietary Stock-picking engine: Top-Seg
This stock-picking engine allows us to rapidly evaluate value in a volatile environment and make investments when the risk-reward ratio is most favourable. As a result we see beyond short-term volatility giving us a better perspective of long-term value and gives us greater conviction when making investments. We combine this stock-picking engine with quantitative asset allocation and risk management to further improve the risk-reward ratio of our portfolios.