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Salient SmallMid Core Portfolio

Overview

Philosophy

The Salient SmallMid Core investment philosophy is based upon the belief that superior investment results can be achieved by constructing a core portfolio of niche focused, small- and mid-cap companies.

Strategy

The investment team strives to achieve superior returns by selecting companies with positive current earnings and reasonable valuations. Typically, investments include companies focused on one business which routinely pay cash dividends.

Process

The investment team strives to achieve superior returns by selecting companies with positive current earnings and reasonable valuations. Typically, investments include companies focused on one business which routinely pay cash dividends.

  1. Quantitative screen to identify growth & value companies that meet specified hurdles, such as leverage and profitability
  2. Qualitative review of eligible companies looking for niche dominance, high quality management teams and well defined growth strategies
  3. Fundamental research on resulting universe to identify companies with strong financials and identifiable sustained competitive advantages
  4. Construct concentrated, relatively sector neutral portfolio of growth & value companies and manage risk
Team

David L. Ruff, CFA

Managing Director & Senior Portfolio Manager
San Francisco

Randall T. Coleman, CFA

Portfolio Manager
San Francisco

Bruce R. Brewington

Portfolio Manager
San Francisco

Eric Sagmeister

Portfolio Manager
San Francisco

Paul Broughton, CFA

Portfolio Manager
San Francisco

Aaron Visse, CFA

Portfolio Manager
San Francisco

Hwee-See Teng

Investment Analyst
San Francisco

Performance

Quarterly Performance (%) as of 09/30/2017

  Q3 YTD 1 YR 3 YR 5 YR 10 YR SINCE
INCEPTION
Composite GROSS 3.72 13.01 21.47 15.87 16.59 10.66 11.30
Composite NET 3.20 11.32 19.04 13.55 14.26 8.77 10.07
Russell 2500 Index NET 4.74 11.01 17.79 10.60 13.86 8.19 8.53
Periods greater than one year are annualized.
Quarterly returns are preliminary.
Inception Date – 04/01/98
Gross returns are shown as supplemental information. Please see important disclosure below.
Net returns are calculated using a highest management fee of 2.00%, applied monthly. Prior to July 1, 2008, net returns are calculated using a management fee of 0.50%, applied monthly.

GIPS Performance & Disclosure

Year End Gross Return* Net Return† Russell 2500 Assets (millions) Number of Accounts Annual Composite Dispersion‡ Annualized 3-Year
Standard Deviation
Composite Benchmark
201617.12%14.78%17.60%$6.24160.47%12.30%13.67%
20156.90%4.75%-2.90%$15.68530.23%12.45%12.42%
20147.54%5.38%7.06%$15.33490.43%12.04%11.68%
201333.36%30.73%36.80%$14.00440.47%13.70%15.63%
201211.92%9.68%17.86%$5.10210.89%16.20%18.97%
20110.31%-1.72%-2.51%$4.28190.94%18.30%23.40%
201028.97%26.73%26.71%$5.67230.68%21.54%26.80%
200938.88%37.56%34.39%$9.34144.49%19.19%24.25%
2008-30.40%-30.89%-36.79%$4.62160.88%16.35%19.37%
20072.69%2.19%1.38%$3.5317NM10.77%11.52%
200620.73%20.17%16.17%$1.265 or fewerNM11.16%11.93%

The SmallMid Core Composite seeks growth in capital by investing in equity securities of companies that are primarily in the Russell 2500 Index with positive characteristics for profitability, growth, and cash flow. For comparison purposes the composite’s primary benchmark is the Russell 2500 Index. The Russell 2500 Index measures the performance of the 2500 smallest companies in the Russell 3000 Index. The Russell 2500 Index is constructed to provide a comprehensive and unbiased barometer for the small- and mid-cap U.S. equity market. The SmallMid Core Composite was created on July 1, 1998. Prior to August 1, 2008, the composite was named Berkeley Capital Management SmallMid Core composite.

Performance shown prior to June 2015 was achieved by the portfolio management team at Forward. Forward was acquired by Salient in June 2015. Salient is the trade name for Salient Partners, LP, which together with its subsidiaries provides asset management and advisory services. Salient claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Salient has been independently verified for the periods beginning January 1, 2011, to March 31, 2016. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis, and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. Salient includes all assets of Salient Advisors, LP, Endowment Advisors, LP, and the non-trust and advisory assets of Salient Capital Advisors, LLC, which are all being managed by Salient’s Asset Management Group. The firm maintains a list of composite descriptions, which is available upon request.

Results are based on fully discretionary, institutional accounts under management in this style. Taxable and non-taxable accounts are included. Past performance is not indicative of future results.

The U.S. dollar is the currency used to express performance. Beginning March 31, 2010, the composite contains wrap/bundled fee accounts. Wrap/bundled fee accounts represent the following percentages of the composite: 2010: 77%, 2011: 74%, 2012: 81%, 2013: 94%, 2014: 94%, 2015: 99%, 2016: 95%. Wrap/bundled fee accounts pay a fee based on a percentage of assets under management. In addition to brokerage commissions, this fee may include investment management, portfolio monitoring, consulting services, and in some cases, custodial services. Gross returns are shown as supplemental information as wrap accounts are stated gross of all fees and transaction costs. Salient’s investment management fee schedule is 0.65% on the first $25 million, 0.55% on the next $25 million, and 0.45% in excess of $50 million. Actual investment advisory fees incurred by clients may vary.

Returns include the reinvestment of all income. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.

Related Resources

Separately Managed Accounts and related investment advisory services are provided by Forward Management, LLC, a federally regulated Investment Advisor.