July 1, 2007
traditional STRATEGIES
US Small Cap Growth
inception date
vehicles
Separately managed account
Mutual fund
Mutual fund
why invest in uS small cap
Offers investors attractive opportunities for capital appreciation and diversification within a less-widely-followed market segment. Small-cap companies typically demonstrate higher revenue and earnings growth potential than larger companies.
resources
Catherine Nicholas talks about the creative application of technology sparking innovation and disruption across small- and mid-cap companies
Launch of Nicholas Partners Small Cap Growth Mutual Fund
On January 16, Nicholas Investment Partners announced the launch of its first no load mutual fund, the Nicholas Partners Small Cap Growth Fund (NPSGX, NPSYX), with $40 million in partner assets, based on its institutional US Small Cap strategy.
our edge
Why Nicholas US Small Cap
Focus: specialize in dynamically growing small- and mid-cap companies
Insights: invest in both equities and convertibles for a holistic view of company
Discipline: combine breadth of quantitative tools with traditional fundamental equity and credit analysis
Alignment: constrain capacity to add value and invest alongside clients
Experience: principals have been managing portfolios for over 30 years
Insights: invest in both equities and convertibles for a holistic view of company
Discipline: combine breadth of quantitative tools with traditional fundamental equity and credit analysis
Alignment: constrain capacity to add value and invest alongside clients
Experience: principals have been managing portfolios for over 30 years
our approach
Investment Philosophy
We believe that dynamic change often creates a disconnect between a company’s future earnings power and its stock’s valuation. Growth catalysts are often not fully understood and expectations tend to be adjusted upwards gradually. We seek to exploit this inefficiency by investing in dynamic companies exhibiting signals of change that will lead to an acceleration in revenue and/or earnings growth in which our research confirms the company’s growth is sustainable and its stock is a timely investment.
LEAD PORTFOLIO MANAGER
Catherine Nicholas
PORTFOLIO MANAGER
John Wylie
Portfolio Construction
Portfolios are actively managed to continually drive to the strongest investment ideas. Position sizes are based on the conviction in the investment thesis of each company relative to other portfolio holdings and risk exposures. Early warnings signs that suggest deterioration in company fundamentals or earnings strength lead to timely sell decisions.
Risk Management
Risk analysis is essential to minimize uncertainties and enhance potential long-term gains for client portfolios. To understand intended and unintended sources of risk, our investment team leverages quantitative tools with experience, judgment and deep knowledge of the holdings within a portfolio on a daily, weekly and monthly basis.
Typical Investment Policies
Number of Positions 80–110
Geography US-listed public equities
Capitalization $100M to 2x max of Russell 2000 Growth Index
Security Max 5%
Sector Max 35% or 2x max of Russell 2000 Growth Index
Cash Transactional, typically <5%
Geography US-listed public equities
Capitalization $100M to 2x max of Russell 2000 Growth Index
Security Max 5%
Sector Max 35% or 2x max of Russell 2000 Growth Index
Cash Transactional, typically <5%
Driver of Expected Return
Bottom up, research-driven stock selection. Industry and sector weights and factor exposures are a residual of the stock-selection process.
