The Oakmark Funds are advised by Harris Associates L.P. an autonomous subsidiary of Natixis Investment Managers, L.P.
Learn more about the principles and philosophy behind our funds at HarrisAssoc.com.
One of our founding partners would always say, ‘If we do what’s right for our clients, the business will take care of itself.’ That ‘client-first’ approach still guides decision-making today.
Bill Nygren, Chief Investment Officer – U.S. Equities and Portfolio Manager
From the founding of Harris Associates, adviser of the Oakmark Funds, through the introduction of our mutual funds, here’s how we got to where we are today.
Harris Associates L.P. is founded, born out of Irving Harris’ family office.
The Oakmark Fund is launched, marking the start of the Oakmark family of funds.
We seek to invest in businesses that are priced at substantial discounts to our estimate of intrinsic value. We think this approach provides us with a “margin of safety,” which reduces risk and allows for above-average returns over time.
We view every stock purchase as if we are buying a piece of a business and seek to invest with management teams that are well-aligned with shareholders. We believe our clients should demand the same from their investment managers. We invest significant amounts of our personal net worth in the Oakmark Funds and are pleased to report that Harris Associates’ employees, the Funds’ officers, its trustees and their families have more than $877 million invested in shares of the Oakmark Funds as of September 30, 2023.
We are patient investors who believe that the intrinsic value of an underlying business will be recognized by the market over time. When we find investments that meet our criteria, we invest as owners.
Businesses trading at a significant discount to our estimate of their intrinsic value
Companies expected to grow per share value over the long term
Executive teams that think and act like owners
We adhere to a fundamental, bottom-up idea generation process. It starts with our generalist analysts who rely on intensive fundamental research across industries to identify investment opportunities. Ideas that meet our business and management criteria are then vetted by the investment committee. During this time, our investment professionals debate the merits of the ideas and our seasoned investment committee members vote on the outcome.
The investment opportunities that make it through this rigorous process are then used to build portfolios for our clients, one investment at a time.
Portfolio: Portfolio managers select stocks from an approved list for their specific funds. The most attractive approved stocks are weighted by upside, with consideration for diversification and fund guidelines.
Approved Lists: The most attractive ideas are presented to our experienced U.S. and international investment committees. The committees determine which ideas should be added to our approved lists based on our price and quality criteria.
Research Scope: Portfolio managers and analysts conduct extensive fundamental research, utilizing financial reports, industry contacts and 1,500 onsite management meetings per year to assess business and management quality.
Eligible Stocks: We use qualitative and quantitative metrics based on considerations, such as the regulatory environment, ownership issues or liquidity constraints to narrow the universe.
Initial Universe: There is a universe of thousands of investible equities to choose from.
Our greatest competitive advantage is our long-term investment horizon. We seek to understand how businesses plan to grow over time and buy them when their share prices are out of favor.
—Michael Neary, Partner and Client Portfolio Manager
We believe our bottom-up research process allows us to identify some of the most attractive investment opportunities in the market. We invest in them based on the strength of our conviction so our best ideas can have a meaningful impact on portfolio performance. We think focusing on our best ideas minimizes risk and maximizes return potential over the long run.
Our research analysts are generalists. This approach ensures that we remain industry agnostic and focused on finding value, regardless of which industries or geographies are in favor at the moment.
As part of the firm’s research process, analysts set a buy target at a significant discount to our estimate of intrinsic value. A sell target is also set, typically at 90 percent to 100 percent of intrinsic value. Analysts routinely revisit these targets as the company’s business fundamentals change.
Active Management
High Conviction
Consistency
We employ a generalist model with our analysts. We think that is important because it allows us to have a much more vigorous debate among investment ideas. We all have an understanding of what’s going on in these industries so we can challenge or assess an analyst’s view of a business when they present it.
—Justin Hance, CFA, Director of International Research
Our greatest value to you as a company is found in the people who deliver our services. Whether they are involved in security analysis, allocation or meeting your account’s needs, each is dedicated to ensuring our relationship delivers the expertise you seek.
