Progressive Investment | Responsible Management | True Alignment

Sustainability

Responsible investment management

Masou was founded with two primary ambitions: to build a best-in-class investment function, and complement it with a sustainable commercial approach that provides true, long-term alignment and always puts our clients first.

We invest responsibly because we feel incredibly privileged to have been entrusted with our clients’ funds, we care about our impact on society, and we want to preserve the natural environment for future generations. But our approach to sustainability goes beyond our investment function, encompassing our entire operation – what we refer to as “responsible management”.

It is an area often overlooked by our industry, but we are resolute in our belief that the only way to deliver superior long-term performance for our clients is to manage both our portfolio and our business in a responsible manner.

The consideration of ESG issues is an integral part of our investment process. Emphasis is placed on the direction of travel and anchored in meaningful capital allocation. Constructing a net zero portfolio today is not necessarily the most effective means of building a net zero world for tomorrow

Progressive Investment

We are committed to managing a single, understandable product, aligning our interests with clients for the long term and proactively reducing the environmental impact of our work. We maintain an ownership structure that prevents these commitments being eroded over time

Responsible Management

Alignment

Charlie Munger famously said, “Show me the incentive and I’ll show you the outcome”. At Masou, we see alignment as a simple but powerful concept. In the same manner that good alignment of interests with management tends to translate into better outcomes for Masou as a shareholder, we believe aligning our interests with our clients will translate into superior and more sustainable returns for our clients over the long term. There are four ideas that underpin our approach to alignment:

Low and Declining Management Fees

Managing a fund should not in itself enrich an investment manager

  • At inception our management fee reflects the cost of gaining equivalent passive market exposure
  • As our business grows, economies of scale will be shared with clients, resulting in lower management fees
  • The costs associated with operating our fund are borne by Masou, meaning our management fee represents a true, all-in fee
Performance-Based Fees

Active return should be the primary driver of investment manager remuneration

  • Our performance fee is designed to reflect the individual performance that each client receives, relative to the closest applicable benchmark
  • Relative performance is measured over a five-year period that mirrors our investment horizon
  • A refundable performance fee reserve provision defers the payment of performance fees and reduces the risk of clients overpaying
Coinvestment

Skin in the game

  • We operate a capital reinvestment program, under which up to half of the profit generated by Masou each year is reinvested in the portfolio
  • Capital is locked up for a period of five years, mirroring our investment horizon
  • Once the capital reinvestment program is combined with our refundable performance fee reserve, a substantial portion of the income generated by Masou is effectively locked up for ten years
Capacity Constraints

Clients in business and prospects in coach

  • We prioritise existing clients’ investment performance over asset gathering by constraining capacity
  • Cash dealing is subject to an anti-dilution levy, in an effort to minimise the impact of fund flows on day-to-day portfolio management
  • A restrained approach to prospecting allows our team to devote more time to deepening our clients’ understanding of our approach and managing the portfolio itself