Investment Strategy

Investment Strategy

The hallmark of our "Growth-With-Value" investment style over Kalmar's twenty-five year history is intense in-house research focusing on under-followed / under-owned / inefficiently-valued "good growth businesses" that are generating major gains in their business value but that have not been institutionally exploited. Typically we purchase companies with revenues ranging from $100 million to $2.0 billion for our Small Cap products and $700 million to $7 billion for our SMid Cap products, and capable of growing a minimum of 15% to much higher rates.

In practice ours is a true investment approach with low turnover, in contrast to the high turnover (+/- 100%) fast-card-shuffle momentum style of most "aggressive small and smid growth" managers. Kalmar in fact seeks longer term ownership of productive growing businesses small enough to capitalize on special niches in the economy or benefit from new products or changed business strategies, yet whose stocks can be bought undervalued, hence, with both lower risk and higher reward potential.

In addition to lower turnover, there is normally limited idea overlap between Kalmar portfolios and the "aggressive growth" momentum style cited above, that is, until Kalmar holdings graduate into the higher recognition small/smid cap arena by virtue of company success and/or expanding Wall Street sponsorship. Because of historically good stock selection, this has happened regularly to our clients' benefit.

A preponderant portion of the investments are in small cap stocks. Investments in small cap stocks involve greater risks than investments in larger, more established companies, are more volatile, and may suffer significant losses. Further, the market for small cap stocks is generally less liquid than the markets for larger stocks, which can contribute to increased price volatility of small cap stocks. Past performance is not necessarily an indication of future results.

Portfolio Construction