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Investment Approach

The Focused Large Cap Growth portfolio seeks long-term capital appreciation. Our management team screens potential candidates with an eye to individual company fundamentals, as well as to their macroeconomic outlook. We target firms with what we believe to be a sustainable growth franchise.

Distinguishing Features

  • Fundamental research helps discern what we believe are superior growth companies and focuses management attention on secular growth opportunities rather than cyclical beneficiaries
  • Cross-correlation analysis provides active diversification and helps manage volatility
  • Conviction-weighted portfolio of 25 to 35 stocks, with low turnover and potential for high earnings growth

Investment Process

The Focused Large Cap Growth portfolio features a four-step process

Identify initial ideas

Prioritize candidates for further research:

  • Market cap exceeding $3 billion
  • Profit growth = earnings of greater than 12%
  • High quality = return on equity (ROE) of more than 15%
Evaluate growth drivers
  • Identify industries that are gaining wallet share as a percentage of GDP
  • Target high-quality firms that are dominant in their field and demonstrate a proven business model that we believe can maximize shareholder value
  • Leverage internal investment research and knowledge
Construct portfolio and manage risk

Understand and manage portfolio risk through attention to valuation and cross correlation, which governs volatility

  • Short-term P/E multiple opportunity
  • Intermediate-term P/E:G
  • Long-term economic value expectations
Explicit sell discipline
  • Maximize the potential alpha of the portfolio by challenging existing holdings. Integrated sell disciplines prevent rationalization of investment ideas