The Lotus Investment Process

At Lotus we look to create synergies to enhance value all the way along the value chain from creation to exit.

The Lotus investment process is based on the fundamental belief that the best way to produce superior returns over the long-term is to integrate sustainability into every aspect of the investment process. The Lotus investment process is broken down into three key phases

1. Identifying companies for further analysis
   • The main industry/sector focus of Lotus is:
     (i) Forestry and Agriculture
     (ii) Financial Services
     (iii) Aged Care and Retirement
     (iv) Information Technology
     
   • The investment team develops ‘industry roadmaps’ which build sustainability themes into different sectors of the economy. The roadmaps also incorporate traditional investment issues.
   • The roadmaps provide insights into which companies will profit from the changes associated with sustainability and those that will face greater risks over the long-term.
   • The roadmaps serve as an idea generator for identifying companies for further analysis.
2. Company analysis and selection
   • Lotus takes great care to understand each company before considering it for inclusion in a fund.
   • Each company is subject to scrutiny across qualitative and financial measures from both individual analysts and the entire investment team.
   • Sustainability research plays an important role in the assessment of both business and management quality.
   • The result of this analysis is inclusion on what Lotus calls its ‘focus list’, which is a list of companies Lotus would like to invest in if the price meets the Lotus valuation target.
3. Constructing the portfolio
   • While there may be many companies on the ‘focus list’, only a select few will be included in the portfolio at any one time.
   • Lotus will only invest when there is high conviction in the company.