In this interview with the FundCalibre team, Bertrand Cliquet, co-manager on the Lazard Global Equity Franchise fund, explains why the portfolio has a significant underweight to the US, the impact of geopolitical uncertainty, and how tariffs are reshaping global economic dynamics.
The interview covers their disciplined approach to stock selection, the importance of predictability in earnings, and how behavioural biases are mitigated through a rigorous peer-review process. It also explores current regional opportunities, with Europe and the UK providing fertile ground for value investors.
Why you should listen to the interview: If you’re curious about how high-conviction investors navigate global markets while avoiding hype-driven pitfalls, this episode is essential. Learn how behavioural awareness and a bottom-up approach can offer resilience in volatile times — and which regions currently offer the best opportunities.
This interview was recorded on 28 April 2025. Please note, answers are edited and condensed for clarity. To gain a fuller understanding and clearer context, please listen to the full interview.
Interview highlights:
Rising uncertainty in the US
“If you look through the history of the strategy, we’ve owned just about 60% in the United States, so, strong allocations. However it’s important to highlight that the result is a 100% based on stock picking on fundamental analysis. So it’s not so much that fundamentals have deteriorated but we like the price less and less and currently has around 40%.
“For us, we really look for those really good franchise companies, but we’re very, very picky on valuation. And the combination that we’ve seen in overall several years is the opportunity set really drying up in the US and increasing elsewhere. When we value our companies, it’s important to highlight that we do that on long-term fundamentals. And what we currently see in the United States is rising uncertainty. And it would be foolish of me or anyone in our team to pretend we know the outcome. But what we have to do is to analyse what the most likely risks are.
“Two things we want to stress and monitor is first the retaliation from other countries in response to tariffs. We’ve seen China already implementing measures, but what will be the answer from Europe? So that’s the first source of uncertainty. And the second one is how long will those last? Will they be in place for one term and this administration, or will this be a longer term feature of the relationship between the United States and its trading partners?
“So when we assess this, it’s important that we take time that we really are trying to look at the fundamentals, but the discussions we have with our colleagues, economist at Lazard and elsewhere, is that it does change the picture with most likely a negative impact on real GDP and conversely a meaningful impact on inflation.”
Subject to peer review
“Think about our investible universe as a group of 230 companies. What we do as a team, we have individual stock responsibility, we carry out our fundamental research and submit this research for the other members of the team to review. And the objective of this peer review process, think about it as a challenge among team members, is to agree on one view of intrinsic value or target price within a three-year time horizon.
“And then what we do is very simple. We rank those companies in order of upside. So you refer to what we call the value rank, is a ranking of the stocks in the universe in order of declining upside. And that’s important because we’d be prepared to go in any of these wonderful businesses, but not at any price. And that’s what the value rank brings in terms of discipline. Now, we still think that overall markets are on the expensive end. So we own 25 stocks today, which is the lower end of our 25 to 50 names.
“It’s interesting because, behavioural biases, herd mentality, incurring of confidence and so on they tend to exacerbate stock price movements. So as a value focused manager, it can be frustrating and certainly test our patience at times. We think the peer review process brings a lot of value and removes a lot of the emotion from the investment process. Because the last thing – and talking about tariffs – when emotion is running high, what we need to best serve our clients is a process that removes the emotion. We try to look at the situation as objectively as possible and draw the right conclusions.
“So the peer review process in that respect is extremely important that we can challenge each other on every single security that make up the universe with a very high degree of vehemence, I would say, as an understatement. So that’s extremely important.
“Then as well, when you look at what that means, we will be able to exploit those more extreme movements from the markets. When you have more of a herd mentality, the market will buy and sell the same stocks. That means that at times yes, valuation will become very stretched, when the sell off starts the pendulum swings the other way, and we’ll be able to buy really, really good businesses at discounted valuations.”
What defines a global franchise?
“Those franchise businesses are helping us address two of the mistakes that fund managers make. The first one is a valuation mistake – a forecasting mistake. When we think a company is going to make a hundred earnings and whoops 50 turn up, well, forecasting the future is very difficult. The second one is overpay. So you simply lack financial discipline. You pay too much for what you’re buying. Now we’ve talked about valuation and the discipline when it comes to the forecasting risk that is the benefit of this franchise universe.
“We want companies where we have an ability to predict future earnings and cash flows with a much lower margin of error than the broader market. So it means that we select companies that have something special about their business, that help them forecastable earnings. So think about natural monopolies. The National Grid or Severn Trent are some of those franchises.
“Companies have scale, so they derive from their scale research and development, purchasing logistic. Something that will help them have superior financial productivity versus their peers and really strengthen their position. So you end up with businesses that will have quite a steady flow of of business. And that’s what we really, really want.”
Conclusion: This interview highlights the power of disciplined investing in a world of uncertainty. From managing tariff risk to leveraging a rigorous peer-review process, the process behind the Lazard Global Equity Franchise fund reminds us that patience, process, and precision are a critical foundation for long-term investing.
Main image: luke-stackpoole–gy4s9SQ1RI-unsplash
