V-Square is a quantitative global asset manager with sustainability at its core. We believe there is an optimum point of equilibrium in the market between shareholder primacy and stakeholder capitalism : increased stakeholder capitalism up until that optimum point can help maximize shareholder value within a long-termism framework. Value created at the expense of the non-investor stakeholders can be short-lived. Over long periods of time, stakeholder and shareholder interests become increasingly aligned.
1. Shareholder primacy is defined as a shareholder-centric form of corporate governance that focuses on maximizing shareholder value.
2. Stakeholder capitalism is a system in which corporations are oriented to serve the interests of all their stakeholders, including shareholders, customers, suppliers, employees, and local communities.
This creates investment opportunities. V-Square believes that the underlying risks and opportunities encompassing these factors are not fully 'priced in' valuations. We apply a systematic approach to exploit these market inefficiencies, reduce risks, and maximize returns.
We start with a top-down approach with macroeconomic views and models informed by multiple variables such as inflation, interest rates, GDP growth, unemployment rate, energy transition forecasts, global policy scenarios, climate change and human systems. Our macroeconomic views integrate our long-term horizon as an investor.
A quantitative approach helps us to deconstruct and assess what fundamentally drives investment returns. Those performance drivers are known as risk factors (alternative risk premia) contributing to the returns beyond the traditional market beta: the resulting excess returns are identified as systematic alpha.
We construct portfolios focusing on alternative risk premia – styles – while intentionally incorporating risk factors derived from material Environmental, Social and Governance (ESG) signals.
Our disciplined approach frees the process from undue subjectivity and emotions, while providing consistency, transparency, cost-efficiency, and scalability.
Quantitative research and innovation are the foundations of our investment philosophy and drive a three-step approach:
By applying those principles, we seek to deliver sustainable returns in excess of the investment universe over a full market cycle.