Independent Franchise Partners, LLP was established in 2009 to offer the Franchise investment approach to institutional investors. The approach is based on the understanding that a concentrated portfolio of exceptionally high-quality companies, whose primary competitive advantage is supported by a dominant intangible asset, will earn attractive long-term returns with less than average volatility. This is particularly true when those investments are selected with an absolute value bias. Franchise Partners has AUM of $18.5 billion.
Hassan Elmasry, CFA Managing Partner, Lead Investor • 37 years’ experience • 19 years managing Franchise portfolios • Morgan Stanley, 1995-2009 • Previously at Mitchell Hutchins Asset Management and First Chicago Corporation • A.B. Economics; MBA, Finance, both from University of Chicago • Former co-chair and board member, Human Rights Watch.
Since we last interviewed you in July 2009, AUM have risen from $250 million to $18.5 billion. Congratulations! How much larger will AUM grow?
We aim to grow our client base a little from here but not too much. Our priority has always been to protect our ability to generate attractive returns for our existing clients. Experience shows that larger size is the enemy of investment returns. We have always tried to manage asset growth very conservatively, even back when we were at Morgan Stanley. So, we have a couple of billion dollars of available capacity for new clients but no plans to dramatically increase assets.