Renaissance Property Securities’ investment philosophy is that each security has an underlying or intrinsic value and that securities become mispriced relative to this value and relative to each other. Such mispricing is the result of irrational market behaviour including, amongst other factors, over optimistic or over pessimistic sentiment towards certain types of securities or sub-sectors of the property market.
Renaissance Property Securities seeks to exploit such market inefficiencies by employing an active, value based investment style. Our belief is that ultimately the value of a stock will, in the long term, be determined by its income fundamentals. As a result, our approach is characterised by bottom up investment research into individual securities, with a particular focus on analysing and forecasting the present and potential future income generation of each underlying property investment.
Renaissance Property Securities has a detailed and rigorous investment process which has been the cornerstone of its success over the past 12 years. The process consists of two fundamental stages:
Our Research effort consists of:
In the Portfolio Construction stage the portfolio managers meet regularly to determine the size of the active positions to be taken in each stock. The factors which determine the size of active positions within the portfolio include the following: