Towle & Co. (Towle) has been added to the SGMF Global Equity Fund (the Fund) as at 14 March 2017.


Addition of Towle

What They Do

Towle seeks to invest in out-of-favour and underappreciated businesses. The investment team describes its approach similarly to theway a private-equity buyer would evaluate a company. The team wants to purchase companies significantly below their private-market net worth.

Towle’s valuation requirement is demanding and tends to lead the team to smaller-capitalisation companies, which is an area of the market that it believes is more inefficient and presents greater opportunity. To Towle, obtaining a high level of economic activity for a low price is an attractive value proposition. Towle’s investment horizon is three years; the team believes that a company needs time to improve its situation and be recognized by the market.

How They Do It
Towle’s investment process can best be described as a collaborative effort using an all-hands-on-deck attitude. All team members contribute to idea generation; however, the majority of ideas originate with quantitative screening. The team first looks at data for the entire U.S. equity market, narrowing the number of portfolio positions to between 30 and 45. The final holdings are subject to extensive future valuation modelling, using a three-year investment horizon and conservative assumptions.

About Towle
Founded in 1981 and headquartered in St. Louis, Missouri, Towle & Co. specializes in a long-term, deep-value investment discipline that seeks to uncover significant discrepancies between stock-market prices and underlying company values. As at 31 December 2016, the firm had eight employees and approximately $700 million in assets undermanagement.


 

Glossary of Financial Terms:
Market capitalisation: Market capitalisation refers to the total value of a company or stock exchange. OR The total value of a company's outstanding shares. Small-capitalisation companies generally tend to have a market capitalisation of between $300 million and $2 billion.
Quantitative: Quantitative analysis is based on computer-driven models.
Value: Value stocks are those that are considered to be cheap and are trading for less than they are worth.


IMPORTANT NOTE: The opinions and views contained in this document are solely those of SEI and are subject to change; descriptions relating to organisational structure, teams, and investment processes herein may differ significantly from those prescribed by underlying managers regarding their own investment houses and investments.

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Past performance is not a guarantee of future performance.
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