Collaboration enables us to develop the clearest possible picture of the businesses we own and those we consider owning.
At Sands Capital, we’re trying to predict the future. That’s an extremely difficult task, and we don’t always get it right. But we need to be right often enough to build wealth for our clients over time. And after three decades, we’ve learned that the best way for us to pursue that mission is to tackle it with teams.
Whether we’re evaluating potential new businesses or monitoring our ongoing investments, we bring together a cohesive group of dedicated professionals committed to engaging in a Socratic exploration. They share information, ask probing questions, bring a diversity of perspectives, and challenge each other to see the world clearly and think creatively.
We’ve intentionally cultivated a culture that values, promotes, and rewards teamwork. We believe doing so allows us to develop the clearest possible picture of the businesses we own and those we consider owning. And it ultimately helps us pursue our mission of building our clients’ wealth with prudence over time.
“Our investment process is important,” says Sr. Research Analyst Massimo Marolo. “But equally important is our culture of what I’d call intimate yet radical honesty. By working together closely over time, we nurture our connections and build the trust needed to have open, frank conversations, in which people are willing to voice strong opinions without fear or hesitation.”
Decisions Born of Collaboration
Teams of research analysts and portfolio managers collaborate as peers on an ongoing basis, encouraging each other to look deeper and think harder. “You’re naturally going to have people who believe different things,” says President and Director of Research Perry Williams. “We encourage that sort of collaboration and discussion. Our investment decisions emerge through these conversations.”
Analysts serve as business model specialists, evaluating structural changes and secular trends occurring throughout the world as they search for businesses that fit Sands Capital’s six investment criteria. Portfolio managers maintain the analyst title and role while also serving as authorities in the management of their strategies. These strategies are run by multiple portfolio managers. The managers work in teams to develop consensus about matters such as which businesses to own and the weighting of specific holdings.
“Research analysts are well versed in the business and the sector,” notes Ashraf Haque, co-portfolio manager of the Sands Capital Emerging Markets Growth strategy. “Portfolio managers bring a different perspective. Our role is to challenge the analysts and the other portfolio managers on any concerns we have, and to consider the entirety of the portfolio—comparing a retail company to a biotech company or a bank, considering the big picture perspective, and thinking about how to take all that into account when weighting the portfolio.”
Team members question and challenge each other, probing assertions and conclusions, without conflicts based on hierarchy or turf. Teams generally stay together over time, building an ever-deeper understanding of their business and of each other. “It’s not atypical to have six portfolio managers and analysts follow a business very closely for eight years,” notes Haque.
Collaborative Research Extends to Site Visits
The Sands Capital commitment to teamwork is evident in the way we conduct site visits. Teams of three to six analysts and portfolio managers visit current or potential portfolio businesses, which they assess from their unique viewpoints and areas of focus.
“Just a few months after I was hired, I traveled to India with six or seven portfolio managers and research analysts,” recalls Research Analyst Danielle Menichella. “Traveling with a posse is a huge advantage—analysts from different sectors bring helpful perspectives, people see different things and have different interpretations. You talk about all of it in the taxi immediately afterward, then on the plane home, and then back at the office. That kind of shared experience makes us cohesive and accountable as a group—and we know we have the support of multiple people on our team. This gives all of us the confidence to take the kinds of well-considered risks you need to invest for growth.”
Incentives Aligned with Teamwork
Sands Capital has built its compensation structure to reinforce its devotion to teamwork. Team members’ incentives are based on Sands Capital’s success in building wealth for clients, not on individual accomplishments.
This approach to compensation naturally attracts people who find value in working as part of a team and believe in our mission. It also prevents the creation of a star system or the promotion of myopic views that can result from overreliance on a single dominant voice.
At the same time, the collaborative investment process constantly provides opportunities for mentoring and training—giving team members opportunities for professional development. That’s one reason every current Sands Capital portfolio manager except one—Chief Investment Officer Frank Sands Jr.—previously served as an analyst at the firm. “Collaborating with other research and portfolio managers on site visits and throughout the investment process helps me to think like a portfolio manager, not only as an analyst,” says Menichella.
Hiring people who appreciate the value of the team approach has contributed to the over 10-year average tenure of our research analysts. The consistency of our team contributes to continuity in both our investment philosophy and approach—key factors in Sands’ ability to add value for clients over time.
The views expressed are the opinion of Sands Capital Management and are not intended as a forecast, a guarantee of future results, investment recommendations, or an offer to buy or sell any securities. The views expressed were current as of the date indicated and are subject to change. Past performance is not indicative of future results. You should not assume that any investment is or will be profitable. GIPS® reports and additional disclosures for the related composites may be found at Sands Capital Annual Disclosure Presentation.