Reflecting on 25 years at Orbis, portfolio manager Ben Preston examines the enduring lessons that have shaped the firm's investment approach and how the team continues to evolve while remaining true to the Orbis philosophy.
2025 marked my 25th anniversary at Orbis, a milestone prompting reflection on the passage of time. As the moment came, I was in Tanzania, having just climbed Africa’s highest peak. If a quarter century seems like a long time, that was put into perspective by my guide telling me that the youngest of Kilimanjaro’s craters – still in great shape – was formed almost half a million years ago.
As long-term investors, endurance is necessary but not sufficient. We’re not just climbers locking in for a long journey, we want our clients to win – our business model depends on it. Neither are we mere rocks withstanding the weather; we must adapt. The sweet spot is staying true to our philosophy while also finding ways to enhance our edge by continuously improving. Thankfully, our mindset of aligning our clients’ results with our own gives us the incentive to get that balance right. One of the structural improvements we’ve made is the introduction of our Decision Analytics team. This team is tasked with crunching data on each of us to uncover and help us work on our individual and collective biases.
With that in mind, I’d like to share enduring lessons shaping how we invest. These come not just from my experience, not just from our founder – Allan W B Gray – and other inspiring mentors, but also from newer team members.
Indeed, the team is stronger than I’ve ever seen it. This year’s outperformance wasn’t driven by getting the big picture right: We didn’t. Markets are still concentrated and regional valuation dispersions persist. Rather, the vast majority of excess returns came from idiosyncratic, bottom-up stock picks from our 40+ analysts globally. It’s a far cry from when I joined a handful of analysts in London. Seeing them hit their stride is a reminder of how far we’ve come.
Lesson 1: Embrace uncertainty
Trained in mathematics, the younger me believed investing was purely analytical: Crunch numbers accurately and reliable outcomes follow. I was wrong. The world is relentlessly dynamic and riddled with unanalysable uncertainties.
In 25 years, we’ve seen it all: The dotcom bust, the rise of China, the invention of the iPhone, the global financial crisis, quantitative easing, the COVID-19 pandemic and – perhaps most unlikely – the election and re-election of Donald Trump. Each impacted company valuations. Few were widely predicted.
The past year has been full of surprises; the future will be too. It’s inevitable that our investment hypotheses won’t always play out, and it’s incumbent on us to act accordingly.
The ability to develop deep conviction, while being willing to change one’s mind, is essential but rare. The childish desire to always be “right” is human but dangerous for investors, as it leads to stubbornness. Recognising that bias isn’t easy – that’s exactly why decision analytics are valuable. I have come to think of intrinsic value not as a point estimate but as a probability distribution. That perspective can identify asymmetries that turn “uncertainty” from being something to be feared, to something to be exploited.
The Orbis Global Equity Fund’s outperformance came despite only approximately half of our shares outperforming. This works because our coin toss hit rate was offset by identifying shares whose upside vastly exceeded their downside, and our winners won significantly more than our losers lost.
The benefit of a contrarian philosophy is not that it helps you be right more often – it usually doesn’t. Rather, being contrarian leads to opportunities where sentiment is so skewed that bad outcomes are priced in. That reduces the downside and enhances the upside. Decision analytics confirm statistically what Allan figured out intuitively: “strong convictions, loosely held”.
Lesson 2: Harness the power of great management
The extraordinary power of excellent, well-incentivised management was easily overlooked by my younger self. In part because it’s hard to model in a spreadsheet. Business conditions are in flux; astute management teams with the ability to adapt proactively create tremendous value.
Companies with superior economics, underpinned by durable competitive advantage, are particularly valuable. Often, they’ve been built by – or attracted – top leadership. But even in competitive industries, a great team aligned with shareholder success is a decisive advantage.
The Orbis Global Equity Fund is full of examples: Brad Jacobs at QXO, Lord Simon Wolfson at Next, Dr Jan van de Winkel at Genmab, Pedro Moreira Salles at Itaú Unibanco. We still love a bargain, so this isn’t a precondition, but our appreciation for exceptional management has grown.
Lesson 3: Trust the team
If one thing makes us optimistic about the future, it is the strength and depth of our investment teams. We worked hard to build a structure encouraging independent thinking, deep research and clear accountability.
We believe this puts us in a unique position among our peers. The largest firms often struggle to maintain investment focus, while smaller firms tend to rely on a single investor with analysts shaped in their image. We sought to create something different: a maturing investment engine powered by people with deep domain expertise and diverse thought processes.
We demand a lot of our analysts. We ask them to specialise and put their top ideas – usually under 10 – into a paper portfolio, which is appropriately benchmarked and analysed. That gives us hundreds of ideas to choose between, each rigorously researched, so we can select only the very best. Aligning their success with yours is a powerful model.
As we continue to develop new tools and technologies, not only to support our analysts’ research but also to identify their most valuable insights, we’re optimistic about letting the best ideas shine through. While meeting with clients last year, many of them asked me to pass on their thanks to the wider team. It’s been a pleasure to do so. They fully deserve it.
In the last quarter, we trimmed some of our biggest winners into relative share price strength, re-established a position in Alphabet, and added to positions in several healthcare companies.