Lazard European Alternative

The Lazard European Alternative Fund's investment philosophy targets pricing anomalies through a three-step analysis. Step one involves in-depth fundamental analysis of a company's operations, competitive position, and growth potential while the second step determines the asset's appropriate price, factoring in its valuation, business cycle, interest rates, and potential re-ratings. Lastly, the differentiation of the investment view is evaluated. This includes understanding where there is market consensus and where the fund's perspective differs, looking for credible triggers that could correct any identified pricing anomaly over the next year. The fund's approach emphasises that a good business is not always a good investment. It focuses on understanding the company, valuation, and identifying catalysts for price adjustment with the process aiming to capitalise on opportunities aligned with private equity interest, considering market conditions and investment cycles. Supporting this process is the Portfolio Management Framework which strategically manages cyclical exposure and equity duration, categorising stocks into four strategic books for a balanced portfolio approach. The framework addresses macro risks like duration and interest rates, adapting to align with market dynamics. It incorporates single-name shorts, futures, and thematic baskets for diversification and risk management, preferring single-name shorts for high conviction and index products for lower conviction. Thematic baskets are occasionally built for specific opportunities. The portfolio typically consists of 60-70 positions with a small net long exposure of around 20% with a gross of close to 120%. The universe consists of mid and large cap companies across developed Europe.