US Small Cap Strategy


Inception Date: MAY 01, 2021

Seeks attractive risk-adjusted returns versus the Russell 2000 Value Index over a full market cycle.

Investment Philosophy

The team’s US small cap strategy focuses on characteristics such as inefficiently valued assets, turnarounds, accelerating growth and overlooked leaders, that may benefit from catalysts such as new management, a more favorable business cycle, product innovation, and/or margin improvement.
The team believes fundamental research can uncover opportunities to invest in companies that are attractively valued and have the potential to benefit from catalysts for future earnings recovery.

 

Strategy Highlights

  • 07 longterm

    Time-tested

    differentiated approach

  • Team icon

    Seasoned team

    averaging 15+ years investment experience as of April 28, 2021

  • Brand

    True small cap specialists

     

     

Our Process

Our disciplined investment approach is executed by an experienced team, which is critical in an asset class where volatility and a lack of efficiency provide an opportunity for active investors.

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  1. Risk Disclosures

  2. All investments involve the risk of loss of principal.

  3. The value and liquidity of portfolio holdings may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the United States or abroad. During periods of market volatility, the value of individual securities and other investments at times may decline significantly and rapidly. The securities of small and micro-size companies can be more volatile in price than those of larger companies and may be more difficult or expensive to trade.

  4. There are risks associated with investing in securities of foreign countries, such as erratic market conditions, economic and political instability and fluctuations in currency exchange rates.

  5. A principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value. “Value” investments, as a category, or entire industries or sectors associated with such investments, may lose favor with investors as compared to those that are more “growth” oriented.

  6. Disclosures

  7. These are not investment guidelines or restrictions and will be subject to change. Actual portfolio will differ.

  8. FEF Distributors, LLC (Member SIPC) distributes certain First Eagle products; it does not provide services to investors. As such, when FEF Distributors, LLC presents a strategy or product to an investor, FEF Distributors, LLC  does not determine whether the investment is in the best interests of, or is suitable for, the investor. Investors should exercise their own judgment and/or consult with a financial professional prior to investing in any First Eagle strategy or product.

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  • Suzanne Franks

    Associate Portfolio Manager

    Industry start:  
    2004
    Year joined:  
    2021
  • Bill Hench

    Head of Small Cap Team and Portfolio Manager

    Industry start:  
    1986
    Year joined:  
    2021
  • Rob Kosowsky

    Associate Portfolio Manager

    Industry start:  
    2002
    Year joined:  
    2021
  • Adam Mielnik

    Senior Research Analyst

    Industry start:  
    2014
    Year joined:  
    2021

Our Process

The team uses a bottom-up process, building the portfolio stock-by-stock.

  • 01

    Narrow the Universe

    • Universe of approximately 3,000 US small cap stocks
    • Ideas sourced from management meetings, industry data, conferences, historical investment experience
    • Seek companies with low price/book and price/sales
  • 02

    Fundamental Research

    Identify companies facing transitory or fixable issues, such as:

    • Inefficiently valued assets
    • Turnarounds
    • Accelerating growth
    • Overlooked leaders

    Determine Catalyst

    • New Management
    • More favorable business cycle
    • Product innovation
    • Margin improvement
  • 03

    Portfolio Construction

    • Diversified with 180-300 holdings
    • Typical holdings under $3B market cap (at purchase)
    • Annual turnover expected to be 35-45%