Small Cap Growth Strategy

Why Choose This Strategy?

• As a high active share, small cap growth equity allocation.
• As an alpha-generating small cap growth position based on strong bottom-up fundamental analysis.
• Diversification factors include traditional sector and industry as well as across the different stages of the growth life cycle.

Investment Strategy

• The team seeks to evaluate management’s ability to allocate capital and expand the company’s balance sheet, in addition to the reinvestment opportunities for the capital being produced.
• The team looks for companies with emerging or expanding moats, as these moats improve cash flow return on investment (CFROI^®) and increase the spread over the cost of capital.
• The portfolio is diversified across all stages of the growth life cycle.
• The managers use margin of safety analysis, stress testing, and multiple levels of diversification to mitigate risk.
• Above-average returns can only be achieved by structuring portfolios distinct from market indices. As a result, the strategy typically holds 55-75 companies, concentrated around the managers’ best ideas.