For over 20 years, our close and well-established contacts with company executives have been the most important tool for stock selection. Each year, we conduct over 600 meetings with the management bodies of our portfolio companies. These discussions serve to review both the previously analyzed financial and non-financial ESG aspects, and to gain a deep understanding of the business models, corporate strategies, and key success factors or drivers.

To support our personal meetings and enable further analysis, we also rely on additional sources of information: for the fundamental data used in our screening, portfolio, and reporting models, for example, we use a wide range of external research providers (brokers) and high-quality data feeds from information services such as Bloomberg and FactSet. We also source external ESG data from providers such as Clarity AI.

In this process, the managers look for fundamental and sustainable value drivers such as consistent growth in business areas, shifts in business models, misvaluations, or restructuring opportunities, in order to identify quality companies suitable for the portfolio. These ideas are then analyzed in more depth and evaluated using valuation techniques such as discounted cash flow (DCF) models, multiples approaches, peer group analyses, or asset-based valuation methods (e.g., assessing the balance sheet and the sustainability of its components). The analysis of individual ESG factors within the business model plays a crucial role in the fund’s investment strategy.

Especially with small and mid-sized companies, which are often still in the process of building their ESG frameworks, our management meetings can provide important impetus. Over time, these inputs can contribute to a more sustainable positioning of the companies and to positive value development.

As a result of our assessment of the business model and further personal meetings with company executives, a focused number of holdings form the CHOM PURE quality portfolio. It is ensured that each selected stock has a significant impact on the portfolio’s overall performance.