New kid on the block IM targets big cap growth prospects

Newly launched boutique Australian investment firm TWC Investment Management (TWC) has unveiled a new global equity strategy targeting companies at the early stages of their industrial lifecycle.

Created for wholesale and institutional investors, the new Select Global Wealth Creators (SGWC) fund invests in a concentrated portfolio of 15-30 high-quality companies “with plausible embedded expectations and positive near-term market sentiment”.

The fund is aimed at investors seeking exposure to a basket of “high cashflow return growth opportunities at reasonable valuations”.

The SGWC aims for annualised returns of three to four per cent over the MSCI World Index, and attracts a management fee of 0.75% p.a. In the three years to end of October 2024, the MSCI World Index has grown 6.90%, with year-to-date gains of 16.9%.

The strategy employs TWC’s proprietary analysis metric, which evaluates publicly listed companies and management teams through an ‘industrial lifecycle lens’ – “anticipating prospective economic return generation in line with consistent corporate performance drivers”.

This “rigorous, evidence-based investment process” involves a proprietary Real Return on Investment (RROI) framework that normalises corporate performance by eliminating distortions from reported accounting statements.

This approach seeks to move away from conventional metrics such as earnings per share (EPS) growth and Price-to-Earnings ratios.

TWC chief executive Owen Hereford notes that the approach aims to “eliminate biases inherent in traditional investing”.

“This enables us to systematically select stocks with the highest potential for outperformance and support our clients’ long-term wealth creation goals.”

The actively managed fund targets a diversity of sectors, seeking companies “with strong cash flow generation run by management teams with proven skill in creating wealth for shareholders”.

Among these include bigtechs Meta and Netflix, chipmaking giant Taiwan Semiconductor Manufacturing Corporation (TSMC), big pharma firms Novo Nordisk and Eli Lilly, fintech Block and global brokerage firm Interactive Brokers.

“Our investment philosophy focuses on identifying innovative companies, such as TSMC and Eli Lilly, with proven track records of generating real economic returns in excess of their cost of capital, along with reasonable embedded expectations and positive near-term operating momentum,” said TWC chief investment officer John Birkhold.

TWC, newly launched last September with three funds, targets wholesale and institutional investors.