Behind each of the ICAP strategies is a practical, value-driven process, which historically has been successful in a variety of market conditions and has helped produce an enviable record of performance over time.
ICAP's investment strategy seeks to find underpriced large-capitalization securities that have a clear catalyst for significant price appreciation within a definable time horizon. ICAP focuses on exploiting market inefficiencies by combining its valuation discipline with dynamic catalyst identification through independent, fundamental, in-depth research. We conduct extensive analysis of worldwide economic and financial market trends. We check external sources for significant developments that could influence a company’s strategy, culture, and competitive landscape. By digging deeper, we strive to uncover values sooner than the market. Our investment team performs its own fundamental research on every company, including communication with top management, customers, competitors, and suppliers.
- Identify Best Values – The team screens the equity universe to identify stocks they believe offer the best relative value, avoiding those companies that exhibit deteriorating earnings trends.
- Identify Catalysts – The team identifies catalysts—events they believe will be the driving force in increasing the stock’s price within a 1-2 year time frame. These catalysts are typically company-specific, such as a new product, a change in management, or a corporate restructuring.
- Portfolio Construction – Analysts present new ideas to the Investment Team, which is composed of portfolio managers and research analysts. The Investment Team discusses and debates each new idea and offers a “buy” or “no buy” opinion on the idea being presented. Utilizing input from the Investment Team, the portfolio managers have ultimate responsibility over stock selection and portfolio weightings.
- Risk Management and Sell Discipline – Risk management and risk awareness are incorporated throughout ICAP’s investment process. The focus is on three elements: 1. Tracking known risks and identifying new company-specific risks inherent in our holdings, 2. Tracking that each holding’s catalysts are on a path to be met, and 3. Avoiding unintended risks in the portfolios. The team closely monitors each stock in the portfolio and will sell a stock when it reaches its target price, sees its prospects change, or determines that another stock offers greater opportunity.
One of the primary reasons for ICAP's continuing success is the ICAP investment team. The senior team members are among the most experienced investment professionals working in the industry today. These veteran institutional money managers have been in the business, on average, for 23 years. To ensure consistent application of ICAP's investment philosophy, our analysts have been developed "in house" through a structured mentoring program with senior committee members. This program allows the experience of the team to be shared with the next generation and it facilitates better communication within each step of the investment process. In order to broaden their capabilities, our analysts generally earn their MBA and CFA designations early in their careers.
ICAP has worked with institutional clients for more than 40 years. We understand the importance of keeping our clients and consultants up-to-date on organizational changes, investment performance, and portfolio strategy. Client relationships are managed by senior professionals. Our client service team is extremely knowledgeable and can provide details on ICAP's investments, portfolio strategy, and outlook. We are committed to ensuring high-quality client service, which has been a hallmark of the firm throughout its history.