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Technology

Technology

Approach


We believe that wealth is created through the long-term ownership of a growing business. We stick to the disciplined approach of buying strong business franchises with excellent management teams at reasonable valuations and holding them over the long term. We believe our investment philosophy can lead to solid performance over time.

We manage a concentrated portfolio of high-quality growth technology companies, with a balanced mix of disruptors, compounders and evolvers.

Disruptors
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We define a “disruptor” as a company that is developing a new business model or challenging an existing one. These companies typically are growing rapidly, often boosted by a backdrop of secular growth. Sometimes a new technology enables the disruption, while other times the disruption may come from using technology in a new way.

Compounders
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We use the term “compounder” to describe companies that can grow consistently and predictably over a long period of time. These companies often have lower growth expectations and may be engaged in more routine businesses, but they also tend to be less controversial. Many compounders may start to diversify into more predictable businesses and/or earn more sustainable cash flows, which can garner higher stock valuations.

Evolvers
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An “evolver” is what we call a mature company with durable revenue streams that is adapting to technological disruption. We believe these companies often possess an underappreciated ability to adapt to disruptive forces.

Benefits


Thematic exposure

We believe that investing in technology companies, or those that are benefiting from technology, offers investors an opportunity to participate in an exciting and rapidly-changing growth segment of the economy. We believe our balanced and selective approach to technology investing can add value over time.

 

Rigorous fundamental research

We conduct bottom-up, fundamental research that is proprietary, rigorous and often contrarian, and we apply dynamic, industry-specific valuation metrics. We stick to the disciplined approach of buying strong business franchises with excellent management teams. We also leverage frequent access to company management teams to gain deep insight. We believe this rigorous fundamental research enables us to identify securities that may generate strong performance over time.

Global reach

We manage portfolios using a team-based approach. Our technology portfolio managers leverage real-time insights from a broader research team that works across all market caps, as well as insights from our Fundamental Equity colleagues across the globe and the Global Fixed Income team.

 

Multifaceted risk management

We employ a comprehensive approach to risk management and work with the Fundamental Equity team’s Chief Risk Officer to scrutinize portfolio risks, avoid unintended factor bets, and work towards our goal of generating excess returns through stock selection. We also seek to benefit from the robust resources of independent GSAM and firmwide risk management teams.