Fundamental Investment Research is Central to Advantus’ Culture
We have a cohesive and robust research platform focused on finding strong relative value supported by a daily exchange of insights among long-tenured experts across diverse asset classes, strategies, sectors and security types.
Emphasis on Retaining Top Talent
The research process begins by hiring and keeping the best people. Recognizing the importance of research, the analyst function has a separate, fulfilling career path at Advantus. Our analysts are seasoned veterans who understand the detailed fundamentals of their sectors and have experience through market cycles.
Collaborative Research Process
We look at asset classes from all angles, and analysts share information on availability of capital, deal flow, and pricing. For example, we leverage market intelligence from our commercial whole loan, REIT, and securitized product groups in underwriting real estate opportunities across the capital structure.
Goal = Make Better Decisions through Collaboration
Analysts perform quantitative and qualitative analysis – the latter as important as the former. The key trait of Advantus is the willingness and ability to share market intelligence, seeking a variety of viewpoints to develop the investment thesis.
Good Securities Make Good Portfolios
We build our portfolios from the bottom up, capitalizing on market opportunities through our disciplined investment framework. The foundation of the approach is a clear investment thesis outlining our expectations of the borrower’s ability and willingness to achieve objectives. The thesis is built on a nuanced understanding of the borrower’s prospects that is confirmed, not driven, by financial data.
Commitment to Performance
Analysts and portfolio managers monitor investments and sector developments on an ongoing basis and evaluate performance relative to expectations expressed in the thesis. For some asset classes, we’ve developed proprietary systems to monitor and analyze data and credit trends. Material deviations prompt a discussion about whether to hold, add or sell. This collaboration is supported by information systems that leverage our data and keep our ideas at the forefront.
Goal = Understand Risk and Cash Flow Potential of Assets Owned by the Companies We Research
The portfolio managers are heavily involved in research, acutely aware of important developments and considered members of the research team.
Wide Variety of Factors Considered for Identifying Investments
Economic strength, demographic factors and demand trends are considered when identifying favorable opportunities, desired characteristics or exposures. Identified securities that meet investment guidelines and restrictions then undergo more detailed analysis.
Quantitative and Qualitative Analysis Focused on Finding Relative Value
Both publicly available and proprietary databases are mined to perform ratio, margin and return analysis. We seek to identify investments where the relative value stands out. We believe management is typically the greatest driver of value in a company. Onsite visits and tours of assets are conducted to assess a company’s management, including their policies and strategies. This allows us to gain insight into how a company generates cash flow and assumes risk from a business perspective, including the businesses the company operates within.
We also look at the following as part of the analysis:
- Relation of business risk and financial risk, and monitoring how the company’s balance sheet is structured to manage or mitigate the risk
- Quality of their asset management and capital expense programs as it is critical to sustaining the income producing potential of the assets over time
- Supply and demand factors and market dominance attributes to determine the strength of positioning with its sub-markets and customers
- Valuation of the company compared to that of its underlying assets, as replacement cost and private market valuations are key determinants in a stock’s value in capital intensive businesses