For investors seeking to add a small cap growth component to their diversified portfolio, or for those looking to replace their existing small cap money manager, we’d recommend considering the Granite Investment Partners Small Cap Growth Equity portfolio as an option.
The Granite Small Cap Growth portfolio seeks to consistently outperform the Russell 2000 Growth Index over a full market cycle (3-5 years), while also assuming less than commensurate risk.1
To learn more about the Granite Small Cap Growth portfolio’s performance versus the Russell 2000 Growth Index, and to compare it to other small cap growth money managers, please give one of our Wealth Managers a call at 1-800-541-7774. You can also request more information by filling out this form.
The Granite Small Cap Growth Investment Philosophy
Granite takes a bottom-up approach, meaning they analyze at a company level to find strong management and superior business models at early stages. All Granite portfolio managers are also analysts, meaning that each member of the investment team is responsible for researching and recommending ideas.
These ideas are then rigorously evaluated and debated in meetings held regularly with the equity team, to ensure the reasoning and analysis behind each recommendation is solid and defensible. It is only after passing the qualitative and quantitative assessments of fundamental research that a stock is considered for investment in the Small Cap Growth portfolio.2
How the Granite Small Cap Growth Portfolio Team Researches Companies
The Granite investment team is often looking for companies that have a new blockbuster product, a positive change in management, or a spinoff or strategic acquisition.
When a company is identified, Granite then applies a unique and diverse approach to obtaining research, including: interviews directly with company management, attending trade shows, sourcing from industry contacts, conferences, trade and general media, and on a more limited basis, Wall Street research.
They prefer to invest in companies that demonstrate organic growth and that have highly predictable revenue and earnings growth, strong balance sheets, and demonstrate high returns on equity and assets. And since these are small cap companies being considered, it’s also important to factor in the threat of new entrants, the threat of substitutes, bargaining power of suppliers, and rivalry among competitors.2
All of this rigorous research and input results in a concentrated Small Cap Growth portfolio of 30-50 stocks (39 as of December 31, 2013), comprised of companies with market capitalizations of between $100 million and $3 billion. The current average weighted market cap of the Granite Small Cap Growth portfolio is $1.570 billion, which is smaller than the average market cap for the Russell 2000 Growth Index, at $2.027 billion (the small cap benchmark Granite uses).1
Performance of the Granite Small Cap Growth Portfolio
The Granite Small Cap Growth portfolio has delivered strong results when the market is rising, but it also has historically followed the market during more difficult times. Since part of the investment philosophy and approach is to stay invested throughout any type of market cycle, the portfolio can be volatile at times.1
Is the Granite Small Cap Growth Portfolio a Good Investment for You?
It’s important to research a money manager and their investment strategies thoroughly before investing, and WrapManager can help.
If you’d like to learn more about whether the Granite Small Cap portfolio could be a good investment for you, or if you’d like to gather more information about the performance of the strategy since inception, please give one of our Wealth Managers a call at 1-800-541-7774, or click here to request more information.
1 Granite Investment Partners
2 Informa Investment Solutions