Domestic Equities

Select Equity

A Differentiated Approach to Concentrated Investing

We believe excess returns are best achieved by investing in high quality companies selling at attractive prices. We focus on companies with strong management teams, broad resources, and a competitive market position that have historically generated, or are positioned to generate, strong Return on Invested Capital (ROIC). The strategy seeks long-term capital appreciation through a concentrated portfolio consisting of the top 15 to 25 holdings from the SBH All Cap strategy.

Investment Philosophy

We believe we can achieve potentially higher outcomes through a focused approach, which allows for concentrating in our highest conviction ideas.

Strategy Description

The team seeks high ROIC companies trading at a 20% discount to our proprietary intrinsic valuation and employs proprietary screens to limit the universe to companies with low embedded expectations. The team integrates Environmental Social and Governance (ESG) factors as a key component in the research process, including analysis of ESG exposure materiality and comparisons against industry peers.

Approach

Return On Invested Capital (ROIC)

The team seeks to uncover companies with high or increasing ROIC, signaling the ability to sustain a competitive advantage.

Free Cash Flow Growth

We focus on companies that can grow their free cash flow and deliver superior risk-adjusted performance over time.

Strong Management Teams

We identify strong management teams that are incentivized to focus on the value of cash flow generation, ROIC, and sustainable corporate cultures.

Independent Approach

Utilizing fundamental analysis, the team employs an independent research approach to uncover catalysts of change that are not fully appreciated by the market.

Integrated ESG Research Approach

We integrate ESG factors into our research as we believe well-run organizations that prioritize the values of their stakeholders can have durable competitive advantages over their peers.

Portfolio Managers

Suresh Rajagopal, CFA

Director of All Cap Strategies, Director of ESG Research

READ BIO >

Investment Vehicles

Separate Account

Literature

Recognitions

Select Equity 6 Stars, All Cap Universe, US Equity Universe1

Related Insights

Explore the views of our thought leaders on related topics.

Contact an Advisor Solutions team member to learn more

1On 11/17/22 SBH Select Equity won the Zephyr PSN Top Guns award, PSN Top Guns 6 Star Category. You can find more information about the PSN Top Guns Award here. Segall Bryant & Hamill did not pay to participate in the PSN Top Guns award. PSN Top Guns 6 Star Category. As of 9/30/22. Criteria: The peer groups were created using the information collected through the PSN investment manager questionnaire and uses only gross of fee returns. PSN Top Guns investment managers must claim that they are GIPs compliant. Products must have an r-squared of 0.80 or greater relative to the style benchmark for the recent five-year period. Moreover, products must have returns greater than the style benchmark for the three latest three-year rolling periods. Products are then selected which have a standard deviation for the five-year period equal or less than the median standard deviation for the peer group. The top ten information ratios for the latest five-year period then become the TOP GUNS.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

All opinions expressed in this presentation are solely the opinions of Segall Bryant & Hamill. You should not treat any opinion expressed as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of the manager’s opinions. The opinions expressed are based upon information the manager considers reliable, but completeness or accuracy is not warranted, and it should not be relied upon as such. Market conditions are subject to change at any time, and no forecast can be guaranteed. Any and all information perceived from this presentation does not constitute financial, legal, tax or other professional advice and is not intended as a substitute for consultation with a qualified professional. The manager’s statements and opinions are subject to change without notice, and Segall Bryant & Hamill is not under any obligation to update or correct any information provided in this presentation.

 

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