European Equities at GAM

Introducing GAM Investments' European Equities Team, Tom O'Hara, Jamie Ross and David Barker. The team discuss their "all-in framework", investment process and why they think now is a good time for investing in Europe.

Tom O’Hara: It's great to be joining GAM. It's a very exciting time in the company's turnaround thanks to new long-term focused majority ownership. And on top of that we feel a very strong cultural affinity with GAM thanks to its strong heritage in European equities.

On a personal level, my investment career started thanks to John Bennett. He actually spent 17 years at GAM and he always talked very, very highly about the investment-led culture that Gilbert de Botton cultivated from the outset. So it feels like a very natural fit for us to be joining GAM.

David Barker: So let me tell you a bit about our investment process. So we will continue providing a core approach, providing consistency with the past. We will have a high conviction, concentrated portfolio of around 30 stocks. And we'll be using our All-in Framework which is a simple and repeatable approach we can apply across the European market.

We will use our all-in framework which contains three components by adding our expectations of earnings growth, cash return and valuation change for a company to get to our all-in return for a stock. We then ask ourselves, does the all-in return exceed the market return? This is an effective way for comparing the attractiveness of a single stock or sector across the market. And you see us refer to this a lot across our presentations. Lastly, we want to be open source. That means sharing our investment insights, our process and summaries with you.

Jamie Ross: So now on to why Europe and why now. For the last few decades Europe and its equity market has clearly languished and has needed a trigger for change. The simple observation of a cheap valuation for Europe has never, ever been enough. So Donald Trump has come along and he's pulled that trigger. And in doing so, he's done more for EU unity than any post-war president.

And we're starting to see a more assertive, a reassertive Europe. We can see that in a few ways. Firstly, we're starting to see a more loose fiscal stance in Germany. We can also see the mention and the clarity of message around unity growing amongst EU leaders. And we believe that this will lead to an environment where we're going to see more investment. We're going to see more innovation. We're going to see less regulation and a less fragmented European Union. For us, this is a key turning point for the European equity market.