Letko, Brosseau and Associates is an independent investment management firm dedicated to serving both institutional and private investors. Our approach is based on fundamental analysis of economic and business trends. We seek to combine insightful research with careful attention to valuations in order to achieve above average investment returns with moderate levels of risk.
Our prime goal is to meet the investment objectives of our clients. We believe that by putting our clients’ interests first, our own success will follow.
Letko Brosseau and Associates Inc. (LBA) is an independent investment management firm founded in 1987 by Peter Letko and Daniel Brosseau. The company currently employs approximately 60 individuals in two offices in Montreal and Toronto, Canada.
We offer a long-term investment approach based on original investment research that seeks to develop strong understanding of economic and business trends. Portfolios are broadly diversified by industry and geographic regions. Careful attention is given to identifying companies with strong positions in their respective markets and well-developed business strategies. A business perspective for acquiring investments at attractive valuations is the third element in the firm’s approach which has enabled us to consistently produce good results for our clients.
Today LBA manages over C$23 billion in assets, close to 60% of which are in balanced mandates. Institutions such as governments, pension funds, charitable foundations and corporations represent 80% of these assets. The firm also invests approximately $4 billion for individuals and families. Investment formats include segregated portfolios as well as pooled funds, both taxable and non-taxable. All are invested in a similar fashion by the same investment team.
LBA is registered with the securities commissions of all ten Canadian provinces. Investment services are also offered to U.S. residents through Letko Brosseau Investment Management Inc. which is registered with the SEC.
Source: Letko, Brosseau and Associates
Our in-house research effort enables us to identify investment opportunities and drives all investment decisions. This work combines a macro-economic approach with thoughtful analysis of trends in major industrial groups and detailed evaluation of companies. Methods embody classical economic and business analysis to understand market position, growth prospects, and cost structures, among other factors. The goal is to understand businesses well and to be able to determine what constitutes fair value for an enterprise.
In pursuing this objective the firm relies on a variety of sources of information, including published annual and interim reports as well as other documents that may be available to develop insight and understanding. Industry publications and analysis prepared by third parties are frequently used. Attendance at industry fairs and conferences are also helpful. In each case LBA personnel will contact and meet with representatives of companies that are being considered for investment. Our research includes the development of financial forecasts for each company considered with the cooperation of senior management. We believe this is an important part of our evaluation process, helping us better understand the various influences on profitability and possible changes.
he team gives careful attention to the price paid for all investments both absolute and relative to other opportunities. Discipline in comparing market prices to internally developed valuations and ensuring we do not overpay is important to long term results.
The scope of our work is global. LBA seeks and evaluates attractive industries and companies around the world and measures them against their international competitors.
intrinsic value is created in a business over the long-term. To capture that value, the team strives to develop insight into fundamental trends that will have a longer term influence on an investment.
Since LBA’s inception over 20 years ago, the firm has pursued the same investment approach in all asset classes and has applied this approach consistently across all portfolios. The firm uses no external managers, and all investment decisions are made based on research performed by the firm’s portfolio management team.
LBA’s goal is to build portfolios that are exposed to diversified economic activity in many industries and regions of the world. In equity investments, we focus on companies that have strong balance sheets, steady cash flow, solid dividend yields and the prospect for appreciation on the strength of improved performance and market re-valuation over a three to five year time horizon. In fixed income investments, we emphasize holding high quality bonds that meet the objectives of stability and income. We focus on studying the world and North American economies to develop views on future movements in interest rates to position the portfolios appropriately. We also spend time looking at individual securities and their particular attributes, such as credit risk, inflation protection, embedded options, and other characteristics.
Our equity portfolios typically consist of 80 to 120 companies, diversified by sector, geography, and by individual security. We generally do not set formal targets for sector or geographic weights, but rather allow security selection to drive the process. Portfolios are then reviewed to ensure they are constructed with balanced exposure in mind and good representation across many industries and regions of the globe.
Because we seek businesses that will appreciate in value over three to five years, the turnover rate on equity portfolios is relatively low at 20% to 25% per year. Turnover on fixed income is even lower at approximately 10% per year.
At Letko Brosseau & Associates, we seek to manage investments by following three basic principles:
Develop a high level of understanding for the businesses we may invest in.
Ensure portfolios are well diversified.
Pay careful attention to valuation and the price paid for all investments.
Pursuing these principles we believe that risk can be managed effectively allowing portfolios to fully capture the investment returns that are widely available in the world economy.
Source: Letko, Brosseau and Associates
145 King Street West, Suite 2101