Epoch Investment Partners Has the Right Attitude to Owning Their Portfolio

April 19, 2020

Steven Bleiberg is Managing Director and Portfolio Manager at Epoch Investment Partners, Inc. He is involved with the design and development of investment strategies and is a contributor to Epoch’s thought leadership.

Earlier, he was a portfolio manager at Legg Mason responsible for managing $7.5 billion in various asset allocation-based funds including Target Risk, Target Date and Dynamic Risk Management.

Prior to that, he was the head of investment strategy at Citigroup Asset Management and a portfolio manager at Credit Suisse Asset Management.

He is a co-author of Winning at Active Management: The Essential Roles of Culture, Philosophy and Technology. He received a bachelor’s degree from Harvard and a master’s degree from the Sloan School of Management at MIT, with a concentration in finance.

In this 3,678 word interview, exclusively with the Wall Street Transcript, Mr. Bleiberg reveals many of his top picks and the investment philosophy that determines them.

“…If you were going to go out and buy a business yourself to own 100% of it, how would you focus on it, or how would you make that decision, first, whether to do it and, second, how much to spend?

You would not look at what the accounting earnings are going to look like each year for the next 10 years. What you would want to know is: How much cash is it going to cost me out of pocket today to buy this business, and how much cash is going to flow into my pocket each year going forward?

That’s how you would analyze it. And to us, buying stocks, even though you’re not going to be buying the whole company, that’s still the right way to think about it because you’re trying to figure out what is this business worth to me as an owner.”

This leads Mr. Bleiberg to focus his stock picks on several high return strategies:

“So with the strategy, which we call Capital Reinvestment, we might like a company such as Visa (NYSE:V) or Mastercard (NYSE:MA) because they have very high margins.

If you think about their marginal cost — if I go to the store, and I charge something on my Visa card, they collect their fee as a percentage of what I spent at the store. But their marginal cost for processing that transaction is extremely low. I mean, this is all automated.

And so it’s a very high-margin business. So that’s what drives the high return on invested capital there.”

Get all the most important picks from Epoch Investment Partners by reading the entire 3,678 word interview, exclusively with the Wall Street Transcript.