Strategy Inception
1998
Strategy AUM (USD)
$8.14 B
As of 03/31/2024
Average Team Industry Experience
22 Years
As of 12/31/2022
We believe investing in high-quality, small cap businesses selling at a discount to fair value will generate strong risk-adjusted returns over time. Downside management and low volatility are critical to producing long-term outperformance.
Key Investment Tenets
Increase exposure to high-quality and deselect low-quality companies to reduce value traps
Create robust risk/return profiles to improve probability of long-term outperformance
Rebalance security weights to control risk and generate alpha
Emphasize sustainable income as a key component of total return
High-Quality Defined
We evaluate three important factors in analyzing companies to determine their level of quality:
Business Quality
Sustainable competitive advantages
High barriers to entry
Market share
Financial Quality
High returns on capital
Strong balance sheets
High free cash flow
Management Quality
Proven track record
Skilled capital allocation
Meaningful ownership
ESG considerations
Robust, bottom-up, fundamental research determines a downside and fair value potential for each security.
Small Cap Value Investing Approach
A critical analysis of important value investing attributes provides an in-depth view of our investing opportunity set.
✓ Quality Focus
Unique and holistic approach while adhering to strict valuation discipline.
✓ Creative Approach
Thoughtful, team-based, differentiated approach to discovering value in small caps.
✓ Enhanced Downside Protection
Rigorous focus on quality and dynamic position sizing to help mitigate downside risk.
Attractive Long-Term Risk/Return Profile
History of strong risk-adjusted returns with high active share and low correlation to peers.
Investment Process Snapshot
Through a continuous, multi-step process, we monitor investment universe opportunities and risks and put equal emphasis on buy and sell decisions. Our process screens down a universe of approximately 3,000 securities to the most compelling 75-150 portfolio holdings.
Idea Generation
Watch list
Due diligence
Quantitative quality and valuation screening tools
Fundamental Research
Full analysis of fundamentals, management, business quality and competitive position
Assign total quality scorecard methodology
Team discussion to review buy or pass decision
Portfolio Construction
Bottom-up security selection
Dynamic position sizing matrix
Disciplined sell process
Global Value Equity Team
Averages 20+ years of industry experience
Team manages over $47 billion in AUM
Portfolio Managers
Firm Start
2008
Industry Start
1991
Firm Start
2009
Industry Start
2009
| Average Industry Experience | 22 Years |
| Assets Under Management | $8.14 B USD As of 03/31/2024 |
| Location | Kansas City, MO |
Cross-Discipline Support
Client Portfolio Managers
Investment Analysts
Global Equity Trading
ESG & Investment Stewardship Team
Takeaways
Seeking high-quality, small cap companies with competitive advantages and strong balance sheets.
Robust fundamental research determines company downside and value.
Active management seeks to deliver strong risk-adjusted returns and downside management.
High-quality companies are typically those that exhibit high, stable and sustainable returns on capital, attractive free cash flow generation, low financial leverage, and franchise sustainability.
Sources: MSCI Inc., FactSet
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