DAVIS ADVISORS

Davis Advisors, (Davis) is an independent investment management company founded in 1969 by Shelby M.C. Davis. Today, the business and research team is headed by Christopher Davis, Chairman, Portfolio Manager and Research Analyst and manages more than US$25 billion (as at 31 December 2024) across a range of equity strategies on behalf of its clients.

While the Davis business has established an enviable track record dating back some 45 years, the actual genesis of the firm’s signature Davis Investment Discipline dates back a further generation to Shelby M.C. Davis’s father, the legendary Shelby Cullom Davis (Shelby).

In 1947, Shelby invested $100,000 of his family’s capital, primarily in financial stocks, and famously turned it to more than $800 million by the time of his death in 1994. His discipline was straightforward – he purchased durable, well-managed businesses at value prices and held them for the long term, allowing the power of compounding to work. This philosophy provides the foundation of the Davis Investment Discipline.

Davis recognises that its success is determined by its ability to build and preserve wealth for its clients. The business is independent from institutional ownership; it is wholly employee owned. Independence allows the team at Davis to make what they believe are the best long-term decisions for their clients; their mission, to serve clients with integrity.

The team at Davis has successfully managed investments across a variety of market and economic conditions using its proprietary Davis Investment Discipline. Davis believes in patient, long-term investment practices and is wary of investment ‘fads’. The investment team concentrates on the underlying economic and business fundamentals of each investment and maintains an old fashioned emphasis on rigorous research.

The team is willing to look different from the benchmark. While this means they will at times be out of step with market returns over shorter time periods, Davis believes it has been integral to both outperforming the index since the strategy incepted and to adding value as a true active manager.

Staying ahead of change and secular trends, and being early to identify which companies will be the new leaders two, three and five years from now is the forward-looking approach adopted, rather than simply allocating portfolio investments based on historical growth, the current size of a company and/or its weight in a particular index.

A strong alignment of interests between their investment managers and clients is a central tenet of Davis’s philosophy. The Davis family, employees and directors have more than US$2 billion invested side-by-side with investors across all portfolios they manage. In addition, shares in the relevant portfolio comprise a significant proportion of each portfolio manager’s remuneration.

    Davis Advisors – a generational success story.

Why has PAN-Tribal selected Davis Advisors?

As well as a unique and time-tested investment discipline, solid long-term performance track record and a quality investment team, there are a number of other reasons Davis Advisors were selected:

Longevity – Davis Advisors has been operating since 1969, although its proprietary investment discipline dates back to the 1940s.

Transparency – of investment process and business operations, and openness when dealing with people across the business.

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An exceptional alignment of interests – the Davis family, employees and directors have more than $2 billion invested side-by-side with fellow shareholders; they experience the same risks and reap the same rewards.

A long-term view – Davis believes that Wall Street is driven by short-term incentives; to support their long-term view, Davis’s analysts and portfolio managers are incentivised on rolling five-year time periods.

They ‘eat their own cooking’ – as well as investing in the fund, a large portion of portfolio manager’s remuneration consists of units in the fund they manage.

Staying ahead of change and secular trends, and being early to identify which companies will be the new leaders two, three and five years from now is the forward-looking approach adopted, rather than simply allocating portfolio investments based on historical growth, the current size of a company or its benchmark weight.

Key aspects of the discipline:

• Davis buys businesses as opposed to trading stocks.
• The intrinsic value of a business may differ at times from the value implied by its stock price.
• Fundamentals-based, bottom-up research can be used to estimate a business’s intrinsic value.
• Davis adheres to a rigorous price discipline, paying careful attention to the valuations and earnings multiples of every company owned or considered for investment.

“Our investment process is founded on two essential questions: ‘What kind of businesses do we want to own?’ and ‘How much should we pay for them?’”

Danton G. Goei – Portfolio Manager and Research Analyst

Danton joined Davis Advisors in 1998 and is a portfolio manager for the PAN-Tribal Global Equity Fund and a member of the research team. He received his BA from Georgetown University and his MBA from The Wharton School. Danton was previously employed at Bain & Company, Morgan Stanley Asia Ltd. and Citicorp.