Equity or share capital is raised by a company by selling shares in its stock. Equity confers ownership rights including shareholder participation in future profit growth via dividends and the ability to influence future strategy via voting rights.
In contrast bonds are a debt to the company and enjoy no additional return potential other than the coupon (interest) that they carry.
In the event of liquidation equity shareholders only get the residual value of a company once all its creditors and debt obligations have been honoured.
The price of an equity will fluctuate with changes in expectations of its future earnings and dividend growth and changes in the perceived risk of either the company itself or the broader equity market.
Team Structure
Equity investment at the USS London Investment Office (LIO) is divided into five regions. We have teams specialising in the UK, American, European, Japanese and Asian (excluding Japan) markets.
Each team consist of 3 to 4 individuals reporting to a Head of Desk who, in turn, reports to the Chief Investment Officer (CIO).
Unlike some investment institutions, USS does not employ specialist analyst teams. Instead all our investment professionals are both portfolio managers and analysts.
The American & European desks are responsible for both the developed and emerging markets within their regions. Regular meetings are held between the CIO & Heads of Desk to discuss the appropriate asset allocation between regions & between equities and other asset classes (see investment process).
Policy
USS does not adopt a uniform house investment style or investment policy, thus reflecting its belief that different markets suit different investment approaches and that at different stages in the economic and market cycle, different styles will be successful.
In addition USS allows managers the freedom to invest to their strengths, providing a diversity of approach which should benefit the fund in the long term.
USS is a long term investor seeking to generate above average returns over the longer term. Given the cash flow profile of the fund we have a preference for capital growth over income generation.
Where we believe companies are not fulfilling their potential we engage in constructive dialogue drawing on the expertise of the Responsible Investment team where appropriate.
Equities & investments
Searchable list of the USS top 100 investments
Searchable list of the USS equity holdings