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EUROPE EX-UK EQUITY

Seeking to identify companies undergoing change that is unrecognised or has been underestimated by the market, which will transform these businesses over the long-term.

Our high-conviction stock selection exploits the power of change over the long term.

Tim Crockford

Lead Portfolio Manager, Europe ex-UK

Truly active

Our high-conviction approach results in a portfolio with very different stock weightings to those of the benchmark, generating a consistently high active share.

Long term

Time is the last true arbiter of change, and our strong convictions in companies enables us to invest for the long term with a low rate of turnover.

Proven record

The European investment team has been managing European equity portfolios for over 10 years.

Style agnostic

Understanding how unrecognised change is reflected in a company valuation leads to stock selection that is not driven by the traditional labels of “growth” and “value”, and this is reflected in how the fund has performed.

Forward looking

We look for companies that are repositioning themselves to be exposed to a structural growth theme or undergoing transformational change that will lead to higher future returns.

Power of change

We look for companies that are repositioning themselves to be exposed to a structural growth theme or undergoing transformational change that will lead to higher future returns, which is not yet correctly reflected in analyst forecasts.

Investment approach

Change is systematically under-appreciated by investors. Most stock analysis is linear, but in reality we live in a non-linear world. As a consequence, change can lead to dramatic geometric expansions in stock valuations as changes persist for longer than most investors expect.

We take a bottom-up approach to investing, with stock selection the key driver to returns and the dominant source of relative portfolio risk. Our emphasis is on identifying companies or industries undergoing longer term structural change. Even when a stock decision has a strong thematic element, the fundamental qualities of the company take precedence, and stocks only enter the portfolio on their own merit.

Focus on long-term growth

Our high-conviction approach ensures that stocks are only bought when there are clear insights into factors that will generate positive change in the business and which will persist over time. Markets generally value companies in a short-term and linear fashion. We look for companies that can deliver long-term, compounding growth to their shareholders.

Europe Ex Uk Process Chart

Hermes Europe ex-UK - Investment philosophy
Hermes Europe ex-UK - Investment philosophy

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Powering change: How Ørsted transitioned to renewable energy The energy landscape has changed dramatically in the last decade. Since the 2015 Paris Climate Agreement, big energy companies have pledged to reduce their risk of catastrophic climate change by cutting emissions. But as some struggle in the push into green energy, here we explain how Ørsted has undergone one of the biggest transformations in the sector. The push to reduce carbon emissions has had a profound impact on the energy sector. Renewable energy accounted for half of global growth in energy generation in 2017, according to the International Energy Agency. Indeed, energy companies are taking action to transition to a low-carbon world: Royal Dutch Shell has promised to halve the carbon footprint of the energy it sells by 2050 and invest about $500m a year in cleaner technologies. BP has also set emissions targets and intends to spend $1bn-$2bn on its new energies division. But few have undertaken a transformation as radical as current holding Ørsted. Turning black into green Ørsted, formerly DONG Energy, started life as a state-owned energy company when Denmark looked to harness North Sea oil and natural gas resources in the early 1970s. By the 1990s, Ørsted became one of the first movers in then-nascent offshore wind generation, building the world’s first offshore wind farm in 1991. Over the past decade, the company has repositioned its business from oil, gas and coal to renewable energy, including offshore wind.

Sales Contacts

Angelo Natale,
Director - Business Development, Italy
Paul Voute,
Head of European Business Development