Investment Philosophy

Sustainable Value

At Axia, we adhere to a time-tested strategy that revolves around investing in high-quality businesses with sustainable competitive advantages and superior execution. Our approach involves purchasing these businesses at a discount to their intrinsic value and holding them for extended periods. While this strategy can be compared to the simplicity of maintaining a healthy lifestyle through exercise and a nutritious diet, it is far from easy to implement. The key challenge lies in developing conviction.

To overcome this challenge, we place great emphasis on our investment research and process. Our aim is to cut through the noise and remain focused on the factors that directly impact the intrinsic value of a business. We understand that many events that may affect near-term earnings do not necessarily have a significant impact on the long-term intrinsic value of a business. In fact, the beauty of at quality businesses led by top-class management is that their competitive moat grows over time resulting in a compounding effect on intrinsic value.

We recognize that the concepts of value and margin of safety are often loosely defined and misunderstood. At Axia, we firmly believe in the residual income method for valuing businesses. We diverge from Graham's philosophy that the margin of safety eliminates the need for accurate future estimation. Instead, we agree with Rob Vinal, and emphasize the importance of analysing business dynamics to forecast cash flows as accurately as possible, rather than solely focusing on conservatism. While applying a margin of safety is crucial in pricing relative to intrinsic value, it must not overshadow the need for a precise assessment of future prospects to mitigate potential losses.

By embracing our sustainable value investment philosophy, Axia aims to provide our clients with long-term growth and capital appreciation. We remain steadfast in our commitment to identifying quality businesses, understanding their intrinsic value, and patiently holding them to unlock their true potential.

Investment Process

Rigorous. Model-Driven.

At Axia, our investment process combines a systematic model-based quantitative framework with rigorous qualitative analysis to drive informed decision-making. Through management interaction and channel checks, we conduct efficient research, uncovering growth opportunities in unexpected areas while maintaining objectivity in our sell decisions, free from biases.

Ideas that successfully pass through our quantitative framework undergo thorough qualitative evaluation. We delve into company filings, transcripts, sell-side reports, and conduct meticulous groundwork. Engaging in management interactions and leveraging our network of industry contacts through the expert network further enriches our analysis. Internal deliberation allows for a comprehensive consideration of all perspectives, culminating in well-rounded decision-making.

Our investment process relies on a robust quantitative framework that identifies companies exhibiting potential for unexpected cashflow growth, strong quality of underlying earnings, and reasonable valuations. This data-driven approach allows us to focus on promising investment prospects while effectively managing risks.

By combining both quantitative and qualitative assessments, we maintain a disciplined and rigorous approach to investment evaluation. This methodology empowers us to make informed decisions, capturing attractive investment opportunities while mitigating unnecessary risks.

Portfolio risk is addressed through diversification, position weighting and risk model analysis. We manage the portfolio in alignment with specific fundamental characteristics consistent with our investment philosophy.