How
we invest.

How we
invest.

PHILOSOPHY

We have a co-investment mindset that started with the formation of Tantalum: “how would I invest my own capital?”. This forms the basis for our investment philosophy – to grow wealth in real terms for our investors whilst minimising volatility. At the core of each mandate lies our conviction that a disciplined, fundamentally researched portfolio of investments can deliver real capital growth over the medium and long term, at lower than average risk.

Since inception, we have invested across all parts of the listed investment universe and have strong skills in a wide range of sectors and asset classes. In our multi-asset portfolios, we believe that we can achieve optimal returns using a combination of consistent equity alpha, limited but appropriate beta, and yield management that beats cash. We construct client portfolios within the bounds and opportunities of each client-specific mandate, which imposes an additional layer of constraint around risk (volatility) management and portfolio composition.

https://tantalum.co.za/wp-content/uploads/2020/07/TC_Grow-Wealth-Diag2.png

PHILOSOPHY

We have a co-investment mindset that started with the formation of Tantalum: “how would I invest my own capital?”. This forms the basis for our investment philosophy – to grow wealth in real terms for our investors whilst minimising volatility. At the core of each mandate lies our conviction that a disciplined, fundamentally researched portfolio of investments can deliver real capital growth over the medium and long term, at lower than average risk.

Since inception, we have invested across all parts of the listed investment universe and have strong skills in a wide range of sectors and asset classes. In our multi-asset portfolios, we believe that we can achieve optimal returns using a combination of consistent equity alpha, limited but appropriate beta, and yield management that beats cash. We construct client portfolios within the bounds and opportunities of each client-specific mandate, which imposes an additional layer of constraint around risk (volatility) management and portfolio composition.

https://tantalum.co.za/wp-content/uploads/2020/07/TC_Grow-Wealth-Diag2.png

PHILOSOPHY

We have a co-investment mindset that started with the formation of Tantalum: “how would I invest my own capital?”. This forms the basis for our investment philosophy – to grow wealth in real terms for our investors whilst minimising volatility. At the core of each mandate lies our conviction that a disciplined, fundamentally researched portfolio of investments can deliver real capital growth over the medium and long term, at lower than average risk.

Since inception, we have invested across all parts of the listed investment universe and have strong skills in a wide range of sectors and asset classes. In our multi-asset portfolios, we believe that we can achieve optimal returns using a combination of consistent equity alpha, limited but appropriate beta, and yield management that beats cash. We construct client portfolios within the bounds and opportunities of each client-specific mandate, which imposes an additional layer of constraint around risk (volatility) management and portfolio composition.

https://tantalum.co.za/wp-content/uploads/2020/07/TC_FI-Process-Diag-mobile-2.png

EQUITY PROCESS

IDENTIFY. VERIFY & VALUE. INVEST

Our equity research process is based on bottom-up, fundamental analysis of companies in our universe. We start by identifying potential targeted opportunities within our investable universe (given size and liquidity constraints) using both quantitative and qualitative screening. We then spend time verifying and valuing these targeted opportunities. Once we have determined the target values we then invest where justified, seeking to maximise portfolio return within mandate while minimising risk/volatility.

Our equity valuation process is strongly focused on deriving a rational, economic mid-cycle, calculated value for the shares we invest in, and constructing a diversified equity portfolio that solves for the highest aggregate portfolio return at the lowest, mandate-tailored risk. In forecasting company cashflows, we place a heavy emphasis on understanding industry and company dynamics, supported by strong modelling and analysis. We have a mantra that “each unit of expected return is not born equal” and we take time to understand the range of potential returns that each targeted investment opportunity could present. We frequently cite “positive optionality” as the key variable in our investment theses. We seek to identify assets, cashflows, or projects that are known to market participants but are unpriced or underpriced for a variety of reasons (identifiable or not).

EQUITY PROCESS

IDENTIFY. VERIFY & VALUE. INVEST

Our equity research process is based on bottom-up, fundamental analysis of companies in our universe. We start by identifying potential targeted opportunities within our investable universe (given size and liquidity constraints) using both quantitative and qualitative screening. We then spend time verifying and valuing these targeted opportunities. Once we have determined the target values we then invest where justified, seeking to maximise portfolio return within mandate while minimising risk/volatility.

Our equity valuation process is strongly focused on deriving a rational, economic mid-cycle, calculated value for the shares we invest in, and constructing a diversified equity portfolio that solves for the highest aggregate portfolio return at the lowest, mandate-tailored risk. In forecasting company cashflows, we place a heavy emphasis on understanding industry and company dynamics, supported by strong modelling and analysis. We have a mantra that “each unit of expected return is not born equal” and we take time to understand the range of potential returns that each targeted investment opportunity could present. We frequently cite “positive optionality” as the key variable in our investment theses. We seek to identify assets, cashflows, or projects that are known to market participants but are unpriced or underpriced for a variety of reasons (identifiable or not).

FIXED INCOME PROCESS

Our fixed income investment process offers the strength of a traditional fixed interest investment approach (related to capital preservation and liquidity) with the additional benefit of greater diversification and an enhanced ability to mitigate downside risk.

We start with a top-down macroeconomic study, assessing the global Risk-free rate, Relative inflation and the SA cycle as well as the Risk premium that is applied to South Africa (our 3R’s). This helps to determine our fair value and yield curve shape, as well as our target duration. From a bottom-up perspective, we have a wide fixed income investment universe which covers a broad range of asset classes, unconstrained by a defined bond benchmark. We use six building blocks which cover the traditional fixed interest markets as well as incorporating instruments that exhibit both fixed interest and equity characteristics. We look at the risk/reward of the building block itself, as well as the expected returns within each building block. This detailed work allows us to identify opportunities across the yield curve and in sectors that make sense on a standalone investment basis relative to cash throughout the interest rate and inflation cycle. The duration of our funds is actively shifted based on the economic cycle and our return expectations.

https://tantalum.co.za/wp-content/uploads/2020/07/TC_FI-Process-Diag.png

FIXED INCOME PROCESS

Our fixed income investment process offers the strength of a traditional fixed interest investment approach (related to capital preservation and liquidity) with the additional benefit of greater diversification and an enhanced ability to mitigate downside risk.

We start with a top-down macroeconomic study, assessing the global Risk-free rate, Relative inflation and the SA cycle as well as the Risk premium that is applied to South Africa (our 3R’s). This helps to determine our fair value and yield curve shape, as well as our target duration. From a bottom-up perspective, we have a wide fixed income investment universe which covers a broad range of asset classes, unconstrained by a defined bond benchmark. We use six building blocks which cover the traditional fixed interest markets as well as incorporating instruments that exhibit both fixed interest and equity characteristics. We look at the risk/reward of the building block itself, as well as the expected returns within each building block. This detailed work allows us to identify opportunities across the yield curve and in sectors that make sense on a standalone investment basis relative to cash throughout the interest rate and inflation cycle. The duration of our funds is actively shifted based on the economic cycle and our return expectations.

https://tantalum.co.za/wp-content/uploads/2020/07/TC_FI-Process-Diag.png

FIXED INCOME PROCESS

Our fixed income investment process offers the strength of a traditional fixed interest investment approach (related to capital preservation and liquidity) with the additional benefit of greater diversification and an enhanced ability to mitigate downside risk.

We start with a top-down macroeconomic study, assessing the global Risk-free rate, Relative inflation and the SA cycle as well as the Risk premium that is applied to South Africa (our 3R’s). This helps to determine our fair value and yield curve shape, as well as our target duration. From a bottom-up perspective, we have a wide fixed income investment universe which covers a broad range of asset classes, unconstrained by a defined bond benchmark. We use six building blocks which cover the traditional fixed interest markets as well as incorporating instruments that exhibit both fixed interest and equity characteristics. We look at the risk/reward of the building block itself, as well as the expected returns within each building block. This detailed work allows us to identify opportunities across the yield curve and in sectors that make sense on a standalone investment basis relative to cash throughout the interest rate and inflation cycle. The duration of our funds is actively shifted based on the economic cycle and our return expectations.

https://tantalum.co.za/wp-content/uploads/2020/07/TC_FI-Process-Diag-mobile.png

CONTACT

Ground Floor, South Wing, Great Westerford 240 Main Road, Rondebosch, Cape Town 7700
+27 (0) 21 680 6500
info@tantalum.co.za
https://tantalum.co.za/wp-content/uploads/2020/07/RMI-e1593786399331.png

COVID-19

We will continue to operate during the COVID-19 lockdown. To learn more about COVID-19 in South Africa, please visit sacoronavirus.co.za

Emergency Hotline: 0800 029999
WhatsApp Support Line: 0600 123456

Copyright © Tantalum Capital 2020

CONTACT

Ground Floor, South Wing, Great Westerford 240 Main Road, Rondebosch, Cape Town 7700
+27 (0) 21 680 6500
info@tantalum.co.za
https://tantalum.co.za/wp-content/uploads/2020/07/RMI-e1593786399331.png

COVID-19

We will continue to operate during the COVID-19 lockdown. To learn more about COVID-19 in South Africa, please visit sacoronavirus.co.za

Emergency Hotline: 0800 029999
WhatsApp Support Line: 0600 123456

Copyright © Tantalum Capital 2020