VINY 2026 – Simon Adler Explains Schroders’s Process For 56 Years Of Outperforming & A Japanese Stock Trading for Its Cash

At the Value Invest New York 2026 conference, Simon Adler, Head of the Global Value Team at Schroders, walked through how his team picks stocks and why the process has worked for a long time. Adler manages about $18 billion across UK, European, global, and international value funds. The team is one of the largest dedicated value operations outside the US, and its UK fund has outperformed by roughly 4% a year over a 56-year history. His argument was that the returns come from process; there is no attempt to time when value comes back into favor.

The team buys from the cheapest 20% of the market, screened by Shiller PE or enterprise value relative to ten-year average earnings. They don’t drift toward quality or growth when value underperforms. Adler said they never have.

A repeatable process built over decades

The process at the team is systematic; every idea starts with the screen. No exceptions. Once a stock passes, the team builds a financial model covering 10 to 15 years of P&L, cash flow, balance sheet, notes, and capex, line by line. Adler, whose father was a forensic accountant and who got ahim n accounting book as his eight birthday present, described the culture as obsessively accounting-focused.

The model feeds into seven structured questions every stock has to answer: structural industry change, balance sheet quality, cash conversion, non-financial risks, governance. From there the team distills everything into two numbers – a risk score from one to ten for the probability of permanent capital loss, and a reward estimate for percentage upside to fair value on normalized earnings. Only stocks where the upside is large relative to the downside make it in.