Small Cap Growth (SCG) Strategy
We operate by the “Wallet Rule” with the management teams we invest in, always asking ourselves, “how would we feel handing over our wallets to these partners with no questions asked.”
James Gowen, CFA – CIO
Our Generalist Small Cap team averages 29 years of investing experience. Leveraging expertise in Healthcare, Technology, Energy, Industrials, and Business Services, our goal is to outperform the Russell 2000 Growth over a market cycle. The seasoned team fosters a culture of constant learning, interaction and shared responsibility.
OBJECTIVE: Our strategy takes an institutional, research-based approach to uncovering small cap companies that are Future Compounders™, companies undergoing demonstrated business improvements that we believe can provide higher compound earnings, growth, and stock price appreciation.
ADAPT PORTFOLIO: The team takes a patient, yet opportunistic, approach, striving to hold higher quality companies over the longer-term with very low turnover. The team effectively and proactively recycles cash from sales back into new, better ideas. The firm structure creates alignment of interests, with personal investments alongside clients, with team compensation tied to performance and a single strategy with strict assets under management limits.
PROACTIVE RISK MANAGEMENT: Our responsible investment process seeks to limit downside risk through deep, insightful company knowledge and multiple built-in risk controls. Our team analyzes management teams, future growth strategies, business models and earnings growth drivers while seeking to minimize exposure to other risks such as commodities, binary models, excessive concentration and litigation risks. Certain businesses are avoided. The team works from the bottom-up to create a portfolio structured to capture long-term growth resulting in higher active share.
*Not an employees of Spouting Rock, they provide investment research to Spouting Rock and other investment advisors.