Welcome to Perennial Growth
Perennial Growth Management was established in August 1999 through a joint venture between Perennial Investment Partners Limited and Perennial Growth Management investment staff. Perennial Growth is an active Australian equities manager employing a bottom up, growth-style investment process when picking stocks.A bottom up approach is one where companies are considered on their own merit, by taking into account factors such as management and the business model as well as other characteristics. Perennial Growth believes that growing companies generate the most value for their shareholders. Growing companies attract staff with a high standard of management skills interested in building growing businesses. These companies have the ability to offer investors profitable capital growth.
Perennial Growth Investment Process
Investment Philosophy
Perennial Growth is a specialist active Australian equities manager whose investment process is based on a 'growth' stockpicking investment style. Perennial Growth holds the belief that investment markets are not fully efficient as asset prices are sometimes driven by irrational influences. As a growth investor, Perennial Growth seeks to invest in companies that can grow their business profitably and add additional value to their shareholders. Perennial Growth seeks to invest in companies that grow in a sustainable manner.
Stock Selection Process
Perennial Growth's investment process begins with the screening of their investment universe. Many of these stocks are actively researched by the team through a bottom up fundamental stock picking process. Stocks are eliminated based on factors such as high debt, low interest coverage and minimum market capitalisation. Detailed modelling and research is then conducted by the team. To qualify for investment, stocks must have sustainable growth track records and offer a reasonable share price. Every potential investment opportunity is subjected to a standard range of steps in assessing key qualitative and quantitative criteria:
These are:
- Opportunity & execution
- Growth opportunities for the business
- Management to execute on these opportunities
- Growth opportunities for their industry.
- Perennial Growth's Sustainable Growth Test
- Cashflow growth: the indicator of true underlying growth
- Return on investment is the team's measure on the profitability of growth
- Change in a company's return on investment indicates the trends in growth.
- Lifecycle Valuation: the team's proprietary measure of a business' valuation in accordance to growth expectations and the associated company risk.
Perennial Growth places a great emphasis on direct company and industry contacts and is an integral part of the process. Perennial Growth's proprietary stock ranking model will then rank the stocks according to the above measures.
Each stock is assigned a ranking according to an internally generated modelling process. The outcome of the team's detailed research process is a list of profitable growth companies that are eligible for inclusion in the portfolio.
The final portfolio is constructed according to a strict risk management and compliance regime. The main driver of Perennial Growth's portfolio construction process is the team's desire to deliver a portfolio of growing companies that will be profitable for investors.
Perennial Growth manages the following portfolios:
- Perennial Growth Australian Shares
- Perennial Growth High Conviction Shares
- Perennial Socially Responsive Shares
- Perennial Core Australian Shares
Perennial Growth is headed by Lee Mickelburough. Perennial Growth boasts a very stable and experienced team with an average of 17 years investment management experience for each member of the team. Five members of the Perennial Growth team are equity holders in their business.
