Seeking True Alpha through Maturity Analysis

FTSE chartInvesting is an activity as old as money and although the data and technology has changed beyond all recognition since the ‘big bang’ in the City of London in 1986, fundamental statistical theory has not.  When it comes to assessing the performance of pension fund and investment managers, for example, we tend to see comparisons with standard indexes such as the FTSE 100 or S&P 500. That makes sense if competitive markets work efficiently and effectively with underperformers being forced to raise their game.  But what if all the companies in the index are underperforming relative to their potential?

At a recent responsible investment meeting, the head of responsible investment from a highly respected investment house, remarked that “most companies are mediocre”  performers in terms of management capability and quality. That is what conventional, bell curve analysis would suggest but it is not true when an outstanding company re-sets the benchmark for management quality (for a simple explanation of this please view our 3-minute video*).

The problem with investment strategies that concentrate on conventionally managed businesses is that the biggest opportunities lie elsewhere.  At OMS we have a clear focus on the potential returns that are achievable with human capital and effective Human Governance. Our research, rating and reports are designed to unearth companies where these opportunities lay and how they can be realized, for both the companies and their investors .

If you would like to know where your company or fund portfolio fits on our Global OMI, which companies are best placed for outperformance, or those where the greatest risks lie, please let us know.

*The original benchmark for the Maturity Institute’s scale was Toyota – currently with a market capitalization of nearly four times that of rival GM (Toyota $176.02bn/GM $45.95bn – on 11th January 2016 @ 13:05 GMT)