Portfolio Management Advice for H2 2014 from a Value-Oriented, Low-Volatility Investing Genius

Wall Street Transcript

67 WALL STREET, New York - July 24, 2014 - The Wall Street Transcript has just published its Investing Strategies Report to serious investors. This special feature contains expert industry commentary through in-depth interviews with highly experienced Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: MLP Investing - Bottom-Up Stock Selection - Long-Term Investing - Investing in ETFs - Blue-Chip Growth Investing - Cleantech Megatrend - Canadian Small-Cap Companies - Value and Low-Volatility Investing

Companies include: Ross Stores Inc. (ROST), The TJX Companies, Inc. (TJX), BancorpSouth, Inc. (BXS), American Ecology Corp. (ECOL), Protective Life Corp. (PL) and many more.

In the following excerpt from the Investing Strategies Report, an experienced portfolio manager discusses his investing methodology and current top picks for investors:

TWST: Please begin with a brief introduction to Silvercrest, and tell us a bit about your role at the firm.

Mr. Vogel: Silvercrest Asset Management was founded in April 2002 by former senior management of DLJ Asset Management. All of Donaldson, Lufkin and Jenrette, including DLJ Asset Management, was acquired in the summer of 2000 by Credit Suisse. It was a somewhat different operating environment for us under Credit Suisse compared to DLJ. Moffett Cochran and our Co-Founder, Marty Jaffe, started Silvercrest with the idea of trying to recapture the spirit and operating environment that we enjoyed at DLJ Asset Management.

It's been a great run. We started with nearly nothing as far as assets or clients, but now 12 years later the firm oversees more than $16 billion of client assets and has been quite successful. We became a public company last July.

At Silvercrest, I head up our internal long-only equity offerings. We're value-oriented, and I have a team of five analysts who work with me. We offer six strategies under the Silvercrest umbrella: large-cap value, small-cap value, multicap value, an equity income product, a small-mid product, and a product called Focused Value, which is our most concentrated strategy and probably furthest out on the risk/reward spectrum.

Cumulatively, we have approximately $5 billion of assets in these strategies. All are similar in their philosophy and process. While we are value-oriented, we don't do distressed value. Instead we try to find what we believe are better operating companies run by capable management teams. Our goal is to pick off these companies at opportune price points.

We make a concerted effort to manage higher-quality portfolios. We measure quality in all of our strategies by two metrics, return on invested capital and balance sheet strength. Typically, our median return on capital, ex-financials, will tend to be several hundred basis points higher than the appropriate benchmark. And our companies' level of indebtedness, whether you look at enterprise value to EBITDA or debt as a percentage of capitalization, is apt to be somewhat lower than the respective benchmark.

Our higher-quality mandate typically manifests itself in our portfolios...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Rates

View Comments (0)