The ILC methodology is built upon the idea that wealth creation principles vary depending on where a company falls within its maturity cycle. Good investment ideas are present within each stage of the maturity spectrum, and the ILC process is used to identify opportunities using stage specific criteria that have proven to create shareholder value over time.
Three-step stock selection framework
Stock selection follows a robust three-step process:
Classify – Separate the universe of stocks into stages of corporate maturity and create unique peer sets based on similar fundamental characteristics
Identify – Identify companies that recognize their stage of maturity and analyze management actions for adherence to value creation principles
Select – Perform due diligence on companies that adhere to value creation tenets and assess risk factors compared to return opportunity
Emerging Market equities are managed at River and Mercantile by our experienced team in Chicago, utilizing high active share portfolios driven predominantly by stock selection.
The team joined River And Mercantile in 2017, having worked together at Credit Suisse from 2006, when they developed the Industrial Life Cycle (ILC) methodology.