Independent Franchise Partners LLP (IFP) is an employee-owned investment management firm established in June 2009.
IFP's founding partners previously managed the investment strategy at Morgan Stanley Investment Management. IFP is based in London and is regulated by the UK's Financial Conduct Authority.
IFP specialises in a single investment strategy which aims to identify companies capable of compounding shareholder wealth at superior rates of return over the long-term. The strategy uses strict value and quality criteria to evaluate potential investments.
The IFP Global Franchise Fund aims to achieve a long-term total return (before fees and expenses) that exceeds the MSCI World ex Australia Index, in $A unhedged, with net dividends reinvested (Benchmark).
The fund provides exposure to a concentrated portfolio of global equities by investing in securities issued by companies IFP believes are high quality. IFP selects companies they believe have a primary competitive advantage supported by a dominant intangible asset, such as a brand, patent or licence.
IFP believes that investing in shares of high quality companies, trading at attractive valuations will earn superior returns and with less volatility compared to the Benchmark.
The fund's investment approach is founded on the belief that a concentrated portfolio of exceptionally high quality companies will earn attractive long-term returns with less than average absolute volatility. The fund looks to invest in companies whose primary competitive advantage is supported by a dominant intangible asset, such as a brand, patent or licence.
IFP believes these intangible assets will help to protect the company from competition maintaining the pricing power in their products. This, in turn, should assist them to continue to generate stable profits across a variety of market conditions. The businesses selected also tend to have robust long-term track records and strong management teams.
The fund is constructed one stock at a time and does not use the Benchmark as a portfolio construction tool.
IFP evaluates risk in absolute terms, not relative to the Benchmark, and deliberately avoids the Benchmark in its portfolio construction process. Since its goal is to earn attractive returns over the long term with less than average volatility, IFP focuses on the risk factors that are most likely to influence that outcome. These absolute risk factors include management quality, financial leverage, franchise durability, and free cash flow valuation.
While IFP seeks a diversified portfolio, it would not sacrifice either quality or value to achieve diversification or Benchmark characteristics. IFP’s absolute approach to risk has resulted in historical portfolio returns that are substantially less volatile than the Benchmark.