The central theme is WCM's response to its 2022 underperformance. Instead of blaming external factors, the firm conducted a rigorous internal review, concluding its research pipeline had grown stale and its focus on 'moat trajectory' had lost its forward-looking edge. This led to a rallying cry to 'put the trajectory back in moat trajectory' and a significant evolution of their investment process.
WCM actively shifted its portfolio away from crowded, high-valuation quality compounders. They sold positions like Costco, which had reached a P/E in the 50s, and reallocated capital to areas like 3i Group to gain exposure to its fast-growing retailer Action, which they viewed as an earlier-stage, higher-growth opportunity at a more attractive valuation.
WCM is developing proprietary AI tools, like 'Sherpa', to codify and scale its qualitative investment pillars. These models analyze vast amounts of unstructured data from SEC filings and transcripts to flag material changes in a company's competitive advantages and culture, functioning as a research partner to the investment team.
WCM has become a crossover investor, making late-stage private investments in companies like Anduril and Databricks. This strategy is fully integrated with their public markets team, providing crucial visibility into the AI landscape and building relationships with the next generation of potential public market leaders.
The firm's internal culture of trust, humility, and continuous improvement ('get better') was crucial for navigating the 2022 downturn without panic. This period also empowered a new generation of leaders within the firm to step up with ideas, strengthening the team and process. This internal focus mirrors their external analysis of corporate culture in portfolio companies.
Keep pulling the thread on Mike Trigg and Sanjay Ayer.