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article imageCoining an investment strategy helps companies grow their brand

By Lidya Patal     Sep 30, 2014 in Business
In financial circles, asset managers and investment agencies ascribe to a particular tried-and-true investment strategy. Whether it be buy-and-hold, contrarian, top-down or bottom-up, most agencies gravitate towards one philosophy and become tied to it.
Some companies have gone a step further — coining a particular investment philosophy and in turn helping to set their strategy and brand apart.
Markel Corporation, a global holding company for the insurance industry based in Richmond, Virginia, touts the “Markel Style” as a trademark of all its business transactions. Buzzwords like “hard work” and “zealous pursuit of excellence” dot the description on the company’s website, but it also features some unexpected phrases which provide a unique spin: “We believe in keeping a sense of humor,” explains Markel’s CEO Alan Kirschner.
Like most investment companies, Markel shares a general aim of success, relevance and excellence in their decision-making and acquisitions. But where other companies don’t identify with a certain style, Markel’s specific statement of intent provides an air of independence and familiarity that can be attractive for insurance companies that desire a more personalized approach. And the strategy has paid off, as Markel’s operating revenues grew 44 percent in 2013, to $4.3 billion, and the company recently completed the acquisition of firm Alterra Capital Holdings Limited. Markel’s philosophy has also allowed it to expand and diversify — Markel now features domestic and international insurance holdings, as well as the non-insurance related Markel Ventures — while still consolidating its brand.
Where Markel Corporation’s “Markel Style” shows a company pride, other investment groups opt for an official-sounding name that suggests a comprehensive, learned approach.
For example, Triasima Portfolio Management, the Canadian investment management firm, ascribes to its trademark “Three-Pillar Approach.” When evaluating a stock, Triasima adds qualitative and trend analyses to the well-known fundamental analysis to determine whether to invest. While other firms may do a similar multi-pronged analysis, Triasima sets itself apart with the easy-to-comprehend Three Pillars. “By managing risk on three levels, we are able to effectively implement superior risk control and manage the risk and return characteristics of our portfolios” explains the Canadian investment management firm founded by… three partners. By moving in this direction, Triasima has built itself into a company with over $2.7 billion in assets.
Many other firms resemble Triasima’s straightforward strategy name, including RiverFront Investment Group and its “Art and Science of Dynamic Investing.” Others, however, like New York and Dubai-based Safanad Limited, a global principal investor, use metaphors to communicate their investment strategy.
Safanad, which is a hybrid of a family office, endowment and asset manager, employs a “Weather Map” framework for analyzing major economic and financial disturbances, which it refers to as storm systems. Thanks to recent advances in non-equilibrium thermodynamics, physicists now understand why temperature or pressure differentials, when big enough, can lead to hurricanes, earthquakes and tsunamis. In much the same way, Safanad’s Weather Map helps identify opportunities across global markets that arise when tax rates, government spending, and regulations change.
Safanad has used this framework to good advantage to date including the recent sale of a $1.05 billion healthcare real estate portfolio in the US to NorthStar Realty Finance Corp. and in investments in healthcare and education, to name a few. According to Safanad CEO, Kamal Bahamdan, “For us, the Weather Map isn't just a metaphor. It is an actual science for tracking global economic patterns and changes, which if navigated effectively can create significant opportunities for investment and solid returns."
In the crowded financial marketplace, firms often look for a way to separate themselves but come up empty-handed. As the above companies and others have shown, establishing a unique investment strategy, giving it a name and backing it up with sound investments can pay dividends.
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