US Value Strategy
Inception Date: SEP 01, 2001
Seeks to deliver attractive real returns while avoiding the permanent impairment of capital over time by using a value approach to investing in equity markets.
Overview
Investment Philosophy
- We believe that the market episodically fails to recognize, in our view, a company’s intrinsic value; we selectively invest when price presents what we believe to be an appropriate “margin of safety.”
- We seek persistent businesses that embody asset scarcity, strong capital structures and corporate resilience.
- Our fundamental, bottom-up approach requires a temperament focused on: patience, humility and flexibility.
Strategy Highlights
Absolute Return MindsetDedication to mitigate downside risk.
Flexible, Benchmark-Agnostic ApproachAbility to invest across sector, market cap and asset class without constraints of a benchmark.
Strategic Allocation to Gold and CashOur flexible cash and cash equivalent allocation is a residual of equity selection; we hold gold as a potential hedge against market dislocations.
Strategy at a glance
| Style | Value |
| Approach | Bottom up fundamental |
| Market cap bias | None |
| Sector constraints | None |
| Benchmark | S&P 500 |
| Non-equity securities include | gold, fixed income, cash and cash equivalents, currency hedges |
| Capabilities | Separate account, contact for additional capabilities |
Not all companies held in this strategy will meet the criteria listed.
The above are not investment guidelines or restrictions and are subject to change without notice.
The information provided is not to be construed as a recommendation or an offer to buy or sell or the solicitation of an offer to buy or sell any fund or security.
Our Process
The investment team follows a bottom-up, fundamental approach, focusing on companies with businesses which it believes both exhibit sustainable profitability and are trading at significant discounts to their “Intrinsic Values.”
Risk Disclosures
All investments involve the risk of loss of principal.
Investment in gold and gold-related investments present certain risks and returns on gold related investments have traditionally been more volatile than investments in broader equity or debt markets.
A principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value. “Value” investments, as a category, or entire industries or sectors associated with such investments, may lose favor with investors as compared to those that are more “growth” oriented.
Disclosures
These are not investment guidelines or restrictions and will be subject to change. Actual portfolio will differ.
FEF Distributors, LLC (“FEFD”) (SIPC), a limited purpose broker-dealer, distributes certain First Eagle products. FEFD does not provide services to any investor, but rather provides services to its First Eagle affiliates. As such, when FEFD presents a fund, strategy, or other product to a prospective investor, FEFD and its representatives do not determine whether an investment in the fund, strategy or other product is in the best interests of, or is otherwise beneficial or suitable for, the investor. No statement by FEFD should be construed as a recommendation. Investors should exercise their own judgment and/or consult with a financial professional to determine whether it is advisable for the investor to invest in any First Eagle fund, strategy, or product.
Definitions
“Intrinsic value” is based on our judgment of what a prudent and rational business buyer would pay in cash for all of the company in normal markets.
First Eagle defines "margin of safety" as the difference between a company's market price and our estimate of its intrinsic value. An investment made with a margin of safety is no guarantee against loss.
Benchmark Definitions
Indices are unmanaged and do not incur management fees or other operating expenses. One cannot invest directly in an index.
Standard & Poor's 500 Index: Standard & Poor's 500 Index is a widely recognized unmanaged index including a representative sample of 500 leading companies in leading sectors of the U.S. economy and is not available for purchase. Although the Standard & Poor's 500 Index focuses on the large-cap segment of the market, with approximately 80% coverage of U.S. equities, it is also considered a proxy for the total market.
Team & Process
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Matthew McLennan
Head of Global Value Team and Portfolio ManagerIndustry start:1991Year joined:2008 -
Our Process
01
ScarcityWe look for companies that exhibit scarcity through intangible and tangible assets associated with their businesses that may result in strong demand advantages and/or lasting supply advantages.
We believe that scarcity of assets is the foundation of durability.
02
DurabilityBusinesses with durability generally have long duration, scarce assets, strong capital structures and management with prudent mindsets.
Scarce and durable assets overlaid with a strong capital structure and strong management teams may result in what we view as attractive companies that potentially produce persistent earnings.
03
PersistenceOnce we have identified a company with demonstrated persistence, we look for the intersection of attractive price and timing to selectively participate.
04
“Margin of Safety”Buy and sell decisions are based on our estimates of a company’s “intrinsic value” and “margin of safety”—the difference between its market value and our estimate.
Risk Disclosures
All investments involve the risk of loss of principal.
Investment in gold and gold-related investments present certain risks and returns on gold related investments have traditionally been more volatile than investments in broader equity or debt markets.
A principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value. “Value” investments, as a category, or entire industries or sectors associated with such investments, may lose favor with investors as compared to those that are more “growth” oriented.
Disclosures
These are not investment guidelines or restrictions and will be subject to change. Actual portfolio will differ.
FEF Distributors, LLC (“FEFD”) (SIPC), a limited purpose broker-dealer, distributes certain First Eagle products. FEFD does not provide services to any investor, but rather provides services to its First Eagle affiliates. As such, when FEFD presents a fund, strategy, or other product to a prospective investor, FEFD and its representatives do not determine whether an investment in the fund, strategy or other product is in the best interests of, or is otherwise beneficial or suitable for, the investor. No statement by FEFD should be construed as a recommendation. Investors should exercise their own judgment and/or consult with a financial professional to determine whether it is advisable for the investor to invest in any First Eagle fund, strategy, or product.
Definitions
“Intrinsic value” is based on our judgment of what a prudent and rational business buyer would pay in cash for all of the company in normal markets.
First Eagle defines "margin of safety" as the difference between a company's market price and our estimate of its intrinsic value. An investment made with a margin of safety is no guarantee against loss.
Contact Us
Head of Institutional
Co-President of Napier Park
Relationship Management
Relationship Management Team