The investment philosophy can be summarised as a differentiated approach targeting three types of investment opportunity:

1. Those which are uncovered by the existing investment process used by the GLG Undervalued Assets strategy. They must also exhibit a dividend yield which at least matches the market average.
2. Stocks with strong balance sheets where there is a compelling case for dividend growth exceeding twice that of the market average.
3. Where analysis of the entire capital structure exposes attractive opportunities through investing in the debt of a company.

In seeking out companies with strong cash and balance sheet characteristics – but whose share price indicates that assets or profit streams are undervalued by the market – the managers identify unloved stocks that that they believe are materially better value than the broader market. The requirement of a dividend yield at least matching that of the market ensures the inclusion of investments with the potential for attractive income and capital generation for the portfolio.

Where the existing investment process determines positive equity value, the portfolio also has the flexibility to analyse all areas of a company’s capital structure for attractive income metrics complemented by capital appreciation. This might advocate investment in debt instruments where appropriate, such as corporate and convertible bonds.

Through Man GLG’s platform the team has significant access to resources, allowing them to leverage credit research where cross capital structure opportunities arise.