Arnaud Cosserat and Rick Mercado - Researching Resilience

Arnaud Cosserat, CEO of Comgest, and Rick Mercado, PM at Comgest stop by The Business Brew to discuss quality growth investing.  Comgest is an independent, international asset management group, which since its creation in 1985, has pursued a long-term ‘Quality Growth’ and responsible investment style. Arnaud is a long-standing Analyst and Portfolio Manager specialising in European equities. He started his career in 1989 as an Analyst at Banque Paribas, before joining Société de Bourse Oddo and then Generali as a Portfolio Manager. He holds a Master of Science degree from the ESSEC business school (France) and is a member of the French Society of Financial Analysts (SFAF, Société Française des Analystes Financiers). Before joining Comgest, Rick worked in London as a Portfolio Manager responsible for a North American equities fund with USS Investment Management and prior to that, as a Global Equities Portfolio Manager with F&C Investments. From 2001-2008 he worked in Australia, with Capital Partners as an Investment Analyst and with AMP Capital Investors as an Investment Strategist. He holds a Bachelor of Science in Mathematics and a Bachelor of Commerce in Finance from the University of New South Wales. He is also a CFA® charterholder. This episode is sponsored by Stratosphere.io.  Stratosphere.io is a web based terminal that has financial data, KPIs, links to filings, hedge fund letters, etc.  A key differentiator is Stratosphere.io’s segment data and KPIs, which are triple checked for accuracy.  Stratosphere saves users time, enables easy comparisons between companies, and offers company specific metrics such as subscriber counts, numbers of locations, etc. Head over to Stratosphere.io for a free trial.  Should you want to sign up for a paid offering please use the promo code BREW for 15% off. Big shoutout to @mathewpassy and the team at The Podcast Consultant. Detailed Show Notes: 4:10 - Comgest's philosophy and focus on culture 8:10 - Fighting the ABCs (arrogance, bureaucracy, and complacency) of decay 12:05 - How to appraise culture Paper cited https://hbr.org/1996/11/what-holds-the-modern-company-together 18:48 - Handicapping quality among high quality companies 24:05 - How does Comgest consider valuation risk of the portfolio? 33:35 - Comgest's 80/20 rule and how they hold companies with higher valuations 39:20 - Why recessions are great from an investment perspective 46:20 - What inflation might do to quality companies 53:30 - When to exit an investment (and how to stay in) 1:00:00 - How macro events impact Comgest's analysis