Investment Team:

Randall Coleman, CFA, Portfolio Manager, Analyst view profile
David Ruff, CFA, CIO view profile
Bruce Brewington, Portfolio Manager, Analyst view profile

Investment Philosopy

Berkeley believes that superior investment results can be achieved by constructing a style and sector neutral portfolio of profitable, small- and mid-sized companies. Berkeley strives to achieve its investment objectives by identifying companies that are focused in one business, with reasonable valuations, and investing in them with a long-term investment horizon in mind.

Product Description

Berkeley’s SmallMid Core strategy seeks to provide long-term capital appreciation by investing in profitable, niche focused, small- to mid- sized companies. The strategy uses both quantitative and qualitative screening methods to create a concentrated portfolio of 30-40 stocks, primarily domiciled in the United States.

Quantitative Screen

• Identify companies primarily from the Russell 2500 index with positive characteristics for profitability, growth, and cash flow.
  
• Eliminate companies with negative attributes such as excessive valuation, deteriorating margins, or questionable financial strength.
  
• Seek companies with profitability of at least 15% return on equity and premium return on capital, usually measured over a 3-year time period.
  
• The remaining companies are then tested for above-average earnings growth and earnings yield.
  

Qualitative Review

• Favors companies with dominant niche position.
  
• Industry review considers the number of competitors, capacity utilization, ease of entry, and growth characteristics.
  
• Fundamental research emphasizes the company’s financial statements, which need to reflect clean accounting and have understandable disclosures.
  
• Seek experienced management who communicate a clear, well-defined strategy for growth.
  
• Purchase candidates typically have lower institutional ownership and relatively lower earnings volatility.