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.

Harris Associates

111 South Wacker Drive, Suite 4600
Chicago, Illinois 60606
312-646-3600

Bill Nygren- Portfolio Manager- Headshot

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

Our History

Unwavering focus on value investing

From the founding of Harris Associates, advisor of the Oakmark Funds, through the introduction of our mutual funds, here’s how we got to where we are today.

1976

Harris Associates L.P. is founded, born out of Irving Harris’ family office.

Our Philosophy

We are value investors

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 $585 million invested in shares of the Oakmark Funds as of September 30, 2020.

Patience is key

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.

Two employees in discussions at a work station

Value investing redefined

Price

Businesses trading at a significant discount to our estimate of their intrinsic value

Growth

Companies expected to grow per share value over the long term

Management

Executive teams that think and act like owners

Our Process

Adding value, one investment at a time

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.

Graphic illustration representing the portfolio step in our bottom-up research process Graphic illustration representing the approved lists step in our bottom-up research process Graphic illustration representing the research scope step in our bottom-up research process Graphic illustration representing the eligible stocks step in our bottom-up research process Graphic illustration representing the initial universe step in our bottom-up research process Graphic illustration representing our bottom-up research process

Our Bottom-Up Research Process

Graphic illustration representing our bottom-up research process

Portfolio: We construct focused portfolios. Approved stocks are weighted by upside, with consideration given to diversification and strategy guidelines.

Approved Lists: Analysts’ 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 of approximately 300 stocks based on our price and quality criteria.

Research Scope: Analysts conduct extensive fundamental research, utilizing financial reports, industry contacts and more than 1,500 onsite management meetings per year to assess business value, which results in 600-800 stocks that we believe are high 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 down to about 9,500 stocks.

Initial Universe: There are more than 46,000 investible equities to choose from.

Michael Neary Headshot

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

Our Approach

Focused portfolios

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.

Finding value

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.

  • Bottom-up idea generation: Our generalist analysts conduct research on companies across industries and geographies in search of undervalued, growing businesses with aligned management teams.
  • Rigorous fundamental research: Analysts conduct deep due diligence on potential ideas to estimate intrinsic value and ensure that the ideas meet our management and business quality criteria.
  • Stock Selection Group: A committee of seasoned investment professionals thoroughly vets each new idea before voting on whether it should be added to the firm’s approved lists – a robust discussion in which the investment case is challenged by our experienced professionals.

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.

What you can expect

Active Management

Allocations result from our bottom-up process, not attempts to match a benchmark

High Conviction

Investing only in our best ideas leads to a focused portfolio (generally 20-70 stocks)

Consistency

Throughout our history, we have implemented a consistent investment philosophy

Stock discussion meeting at Harris associates
Justin Hance- Portfolio Manager- Headshot

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

Meet your team

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.