Fund Centre

Philosophy, Process and Team

Investment Philosophy

It is documented that few listed equities deliver the bulk of the stock market’s performance. Led by portfolio manager Raphael Pitoun (AAA-rated prior to joining CQS New City Equity), the investment team undertakes fundamental research and strategic analysis to identify those exceptional companies and construct concentrated portfolios of long-term holdings.

We are looking for companies which deliver high-quality products and services with sustainable business models, a good history of innovation and excellent internal organisation; particularly in their management of human capital and corporate governance.

The companies we select are typically listed in developed markets (principally USA, Europe and Japan), have a long-established track record of success and a market capitalisation of no less than USD3bn. We then seek to construct concentrated portfolios of 20-25 stocks to fit the mandate of our Global or North American strategy.


Our initial universe includes 3,000 mid and large cap companies listed on OECD stock exchanges. The first part of the investment process is based on exclusion; typically avoiding sectors such as banks, insurance, commodities, heavy industry, airlines and telecoms.

Once that screening is completed the objective is to identify the best companies in the world in terms of:

1. Growth: companies with outstanding growth prospects,  differentiated products maintained through best-in-class innovation and permanent adoption of technology

2. Quality: customer-focused organisations with excellent human capital management, strong balance sheets and cash generation, and long-term oriented corporate governance

3. Predictability of economic performance: proven track record of innovation, resilience to technological change and macroeconomic cycles, clear competitive advantages and predictable earnings streams

Based on these criteria, we perform a deep dive analysis on around 500 individual companies – each lasting between three and twelve months – from which we select 50 companies. We conclude our selection process by the writing of comprehensive Strategic Reports.

Our investment approach is based on a repeatable and transparent process as illustrated below:


The thorough strategic analysis of each company enables the investment team to better interpret each company’s financial statements. We look to understand the potential earnings power over time and value the business based on its expected long-term cash flow growth. We then combine traditional valuation metrics with more progressive measures – for example the inclusion of ESG criteria. We believe the short term horizon of many equity investors opens substantial opportunities for our strategy. For more details, a Research and Valuation methodology document is available on request here.

Portfolio characteristics

The portfolio is expected to have between 20 to 25 holdings with an average market capitalisation of around USD40bn. The average portfolio turnover is expected to be approximately 20-30% per annum. The Strategy seeks to deliver performance aligned to the long-term cash flow growth of the underlying holdings, targeting 12%-15% across the cycle.


The team is managed by Raphael Pitoun. Raphael has 20 years’ experience in equity investment (and AAA-rated prior to joining CQS New City Equity). He is supported by two dedicated equity analysts who share coverage of the investment universe. The team is further supported by CQS’ sector and specialist analysts, as well as CQS’ broader platform.


ESG analysis is embedded in each step of our investment process and used as a performance tool. We view ESG as a core aspect of our research process and there is a dedicated review in each of our Strategic Reports. We take time to engage with companies on ESG matters and vote actively on relevant topics/subjects for portfolio companies. For more details, an ESG policy is available on request here.

We look to invest in a small number of corporate stars which have delivered exceptional products and services to their clients. These companies have developed a constant flow of innovation that empowers their customers and generates significant pricing power. We are not interested in brands or trends but in long term leaders in specific industries. These companies are the innovation compounders.

– Raphael Pitoun,
Portfolio Manager, CQS New City Equity

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