Process – Pillow Investments

Why are we different?

1. People

Two different but complementary founders with different backgrounds and experiences, strong convictions and differentiated analytical insights.

2. Process

Concentrated portfolio of quality growth companies over the long term, with strong risk management framework (defense in depth system).

3. Strong track record

Pillow Global Compounders have outperformed, returning 18.9% annually over the 3 year period from 2018 to 2020 vs. the benchmark MSCI ACWI’s return of 10.6% (annualized total return in US$)*.

4. Low fees

That make most of the gains accrue to you, the investor, rather than the managers (or investment professionals or firms).

5. Transparent, consistent & clear communication.

Our Investment Process

A rigorous, disciplined & time tested investment process.

Step 1: Idea sourcing

Through proprietary screens and external research.

Step 2: Fundamental analysis to validate the sustainability of high quality businesses

We look for strong management teams, wide competitive moats, above average EPS growth and superior ROIC (Return on Invested Capital).

Step 3: Comprehensive valuation

The best investment occurs when a high quality company meets an attractive valuation. Our analysis aims to fundamentally relate current & future potential stock prices to the companies’ earnings power.

Step 4: Establish a Focus List

As the basis of our holdings in the ensuing portfolio. This list ranks companies based on our proprietary fundamental, valuation and ESG criteria.

Step 5: Megatrend analysis

Megatrends are major movements, patterns or trends emerging in the macro environment that apply to the world of today and tomorrow. We use these trends to validate the sustainability and attractiveness of the members of our Focus List.

Step 6: Portfolio construction

Our objective is to patiently compound returns over the long term while minimizing risks by constructing a concentrated yet diversified portfolio of less than 30 stocks.

Step 7: Risk management via Defense in Depth system

We define risk as a permanent loss of capital and a significant performance loss relative to a benchmark. Our defense in depth system borrows from the nuclear industry: it is a multi layered framework that uses both qualitative and quantitative mitigation to control these risks throughout the investment process.

* The material contained on this page is intended for informational purposes only. Past performance is displayed only for the sole and specific purpose of demonstrating the experience and expertise of the Pillow Investment Partner Limited. Past performance is not indicative of future results. It does not predict or guarantee future performance. It is not intended to be used as a source of information on any particular company or as investment advice or investment guarantee.

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