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GAM Luxury Brands

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GAM Luxury Brands seeks to deliver long-term capital appreciation by actively investing in 25-35 luxury companies globally. The fund invests in well-capitalised companies that have compounding revenue growth at high and stable margins at their core. Such companies are typically highly cash-generative with conservative balance sheets that render them ideally situated to return capital to shareholders and / or engage in opportunistic and value-creating M&A.
Imagine a flower where the core of the flower is the luxury brands, and then the petals represent the luxury ecosystem.”
Flavio Cereda, Investment Director

Our Edge

Experienced, high calibre team

Flavio Cereda has over 30 years of investment experience in the luxury sector. He has deep knowledge of the brands, their supply chains, distributors and retailers across all markets as well as insights into the sector informed by multi-year social media trend tracking.

Differentiated approach

Our concentrated portfolio invests across a variety of subsectors within the luxury goods industry, spanning goods and experiences: fashion and accessories, watches and jewellery, wines and spirits, luxury travel and hospitality, premium sporting goods, online disruptors, luxury autos and retail. We actively search the market for new opportunities in the products and brands that luxury consumers are gravitating towards.

Active stock selection

Our portfolio is bottom-up and driven by rigorous fundamental analysis of the entire value chain. This focus sets us apart from the more top-down approaches of other funds, which by definition fail to exclude companies losing ground in a competitive environment.

Valuation Discipline

Our disciplined approach to company valuation protects clients from sharp falls when overhyped stocks hit reality. Every stock is carefully analysed and our structured and replicable investment process generates an absolute target price.

Investment Team

GAM Luxury Brands is led by Flavio Cereda, Investment Director. Flavio has overall responsibility for the investment strategy, portfolio construction, research management and luxury sector research.

The team works as a focussed, nimble group of investors bound together by a highly collaborative, tight-knit culture. Although research responsibilities are split by broad sector specialisations, team members also work interchangeably across the market. This makes for a stronger and more flexible team, drives interaction and enables knowledge sharing of specific sectors. 

The team draws on its long-standing relationships with an international network of industry experts, economists and analysts, as well as a ten-year relationship with leading expert network company Thirdbridge, which enables the team to meet the experts who help build its knowledge on companies and industry sectors as part of its research work.

The luxury sector has always fascinated investors: products that nobody really needs but that more and more want with best-in-class companies that thrive on innovation, momentum and brand strength.
Flavio Cereda, Investment Director
Flavio Cereda
Investment Director

Philosophy and Process

Investment Philosophy

We believe that we can add value through bottom-up stock selection which seeks to identify premium brands with heritage and/or disruption potential and strong pricing power in luxury sub-categories, operating from an unconstrained and global universe. Typically, these companies offer compounding high single digit revenue growth at 15%+ margins and high Return on Capital Employed (ROCE)*, and are thus well positioned to create substantial long-term shareholder value. Given the importance of trends in the luxury industry, we believe rigorous bottom-up analysis of companies and their competitive positioning, in addition to consumer preferences, is critical.

* Forecasts are based on certain assumptions and market conditions that may change and have a material impact on future results. Forecasts do not represent a prediction of returns or a promise to deliver any particular investment goal. Actual performance may be greater or lesser than these forecasts.

Investment Process

Our investment process is based on detailed fundamental analysis of companies, with ESG carefully considered at every stage.

We define our investment universe broadly, allowing us to identify multiple, complementary sources of alpha. We employ a top-down lens as one part of the idea generation step within the investment process, which helps identify secular themes and industry trends and can help guide the focus of our company analysis.

However, the decision whether to invest in a company or not is always based on fundamental analysis and stock specifics. As part of this process, we meet frequently with company management teams and industry experts, as well as conducting on-the-ground research. We are especially focused on ESG considerations, given their importance to this sector above many others. This detailed approach allows for accurate, risk-adjusted modelling of future earnings, coupled with an absolute valuation target price. Candidates for investment therefore go through a strict competition for capital, which has assessed all potential drivers of a company’s earnings, their ESG status and achievable valuation.

The third step of the process comprises portfolio construction and risk management. An additional layer of ESG analysis is included, considering the portfolio in aggregate. We model and assess overall portfolio risk, and ensure we are aware of all potential correlations within the portfolio.

1

Top-down analysis

  • Secular themes, industry trends and company/expert meetings
  • Identify companies with robust business models and high barriers to entry
2

Analysis of brand

  • Focus on competitive positioning, brand equity
  • Emphasis on strength and visibility eg compounding revenue growth, margins
3

Portfolio construction

  • Stock weightings based on conviction
  • No tracking error limits or benchmark
4

ESG / Risk management

  • Focus on corporate governance insights
  • Sector and country diversification

Reasons to Invest

Secular growth

Increasing wealth and consumption, driven by millennial and Generation Z emerging market (EM) consumers, means premium luxury brands should enjoy sustained, multi-decade growth.

EM exposure

Demand for luxury goods is increasing among newly middle-class consumers in Asia in particular, giving investors the opportunity to access EM growth rates with developed markets (DM) corporate governance via stable and well-established Western brands with high pricing power.

Potential for substantial returns

High multi-year compound growth means the sector has outpaced global GDP and global and EM equities in recent years. We believe this will continue but we expect large dispersion between winners and losers. This is an opportunity for clients to earn significant alpha.

Sustainability

Investors can access the socially responsible theme through the sector, as luxury goods companies are increasingly responding to growing awareness among younger consumers.

Key Risks

Capital at Risk
: All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

Currency Risk
: The value of investments in assets that are denominated in currencies other than the base currency will be affected by changes in the relevant exchange rates which may cause a decline.

Currency Risk - Non Base Currency Share Class
: Non-base currency share classes may or may not be hedged to the base currency of the Fund. Changes in exchange rates will have an impact on the value of shares in the Fund which are not denominated in the base currency. Where hedging structures are in place, they aim to reduce but may not fully eliminate currency risk.

Special Country Risk / China
: Changes in China's political, social or economic policies may significantly affect the value of the Fund's investments. China's tax law is also applied under policies that may change without notice and with retrospective effect.

Equity
: Investments in equities (directly or indirectly via derivatives) may be subject to fluctuations in value, and their values may be more volatile than those of other asset classes. Equities and equity-related securities (such as warrants and rights issues) can be affected by daily stock market movements.

Market Risk / Emerging Markets
: Emerging markets will generally be subject to greater political, market, counterparty and operational risks.

Shanghai-Hong Kong Stock Connect / Shenzhen Connect Risk
: The Fund may be investing in China A Shares via the Shanghai – Hong Kong Stock Connect or Shenzhen Connect which may entail additional clearing and settlement, regulatory, operational and counterparty risks.

List Not Exhaustive
: This list of risk factors is not exhaustive. Please refer to the relevant Fund’s prospectus.

Our Thinking

Outlook 2026
Will 2026 finally be the year when demand for luxury normalises?
December 2025 | Flavio Cereda

Luxury Brands: “In the absence of further macro shocks, we would expect a gradual but sustained reversal in trend coming.”

Investment Opinions
The great rotation in luxury markets
11 June 2025 | Flavio Cereda

Changes in US trade policy may have pressured luxury brand equities, but Flavio Cereda, Investment Director of the Luxury Brands strategy, sees performance emerging more selectively and expects any slowdown to be milder than feared.

Active Thinking
Active Thinking: Who is buying luxury?
13 November 2024 | Flavio Cereda

Flavio Cereda, Investment Manager, Luxury Equities, discusses the market segmentation of the luxury sector and explains why he prioritises growth over value.

Our Thinking

Fund Information

Contacts

Please visit our Contacts and Locations page.

Disclaimer: Past performance is not an indicator of future performance and current or future trends. The indications could be based on figures denominated in a currency that may be different from the currency of your residence country and therefore the return may increase or decrease as a result of currency fluctuations. Capital at risk: all financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed. Any reference to a security is not a recommendation to buy or sell that security.

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