We seek growth companies at a reasonable price. We are a leading expert on quantifying growth potential of individual companies which gives us a competitive edge in knowing what to buy and when to sell. The objective is to achieve significant alpha and better risk attributes over a 3-5 year horizon, through Separately Managed Accounts.
Equities: U.S. Small-Midcap Growth; U.S. Large-Cap Growth; Mega-Cap Core.
Master Limited Partnerships (MLPs): High "tax-deferred" income and growth through energy MLPs.
The starting point to determine any business's growth
potential is its employment of capital, which is first reflected on its
balance sheet. Academic studies show that certain balance sheet
items have predictive qualities related to a change in a company’s
internal growth potential and that the market is slow to react, thus
creating a mispricing anomaly. To capture this anomaly we apply a sophisticated accounting-based algorithm whose
change serves as a proxy for a change in the price of a company's stock,
thus giving us a competitive edge in the buy/sell decision process.
To manage risk we combine this measurement of growth potential
with a bottom-up fundamental analysis to select only companies that are
profitable, financially strong and have positive cash flow. The result
is a hybrid form of portfolio management that combines a quantitative
marker with fundamental analysis to create
a new pathway to
alpha, one which generates a consistent and timeless source of
returns for us and our clients .
Furthermore, because internal growth potential is less volatile than expectations of future value, these returns are achieved with a low standard deviation when compared to a benchmark index. These two factors, excess returns and low volatility, are the keys to building wealth over time.