Institutional Asset Management

SWS Institutional

Allowing clients to see clearly in an ever-changing market, we seek to amplify the impact of their portfolios through a rigorous investment process, overlaid with institutional-grade premium risk management.

Investment Philosophy

Capturing profitable market share is the kernel to value creation in public equity. Companies’ ability to take share is becoming increasingly reliant upon harnessing insights from data.

SWS Institutional’s investment process is engineered to capture the market’s inefficiency of pricing these outcomes in the public equity market.

Portfolio Construction

After a thorough assessment of company fundamentals, we allocate capital to issuers via dynamic position sizing that reflects our relative conviction.

We continually calibrate our fundamental theses in light of new data, allowing for consummate adaptability.

Risk
Management

With backgrounds from a multibillion-dollar pension fund, our portfolio managers have a deep understanding of the importance of risk management. This is the key to maximizing odds of repeatability across various market backdrops.

By harnessing the explanatory power of risk management, our goal is to make all sources of relative return to be the direct result of risk factor expression.

An Adaptable Process

The universal truth we seek: cash flow generation prospects.

The pace of innovation and the speed at which companies deploy it are ever-increasing. We see it imperative that our investment process operates at the same velocity.

The universal factors we assess across every company:

Qualitative

Competitive advantage +

How companies maintain (and preferably expand) profitable market share. This is the kernel to economic value creation.

Business quality +

Relative price stability of products sold. An issuer facing a fire sale of its inventory has a very different business quality profile than one that's sold multi-year subscriptions based on user count.

Management quality +

Running a public company does not come with a playbook, which causes a wide dispersion of perceptions on how to create value for equity shareholders. Management teams with deep benches of talent and strong governance typically arrive at better conclusions faster.

Intellectual property +

Intellectual property can be the defining force that widens competitive moats. Trade secrets and patent portfolios can be indicators of its presence, but comparative analyses of issuers' commitment to R&D can be just as revealing.

Quantitative

Cash flow stability +

Every security value is a reflection of the future cash flows it will deliver to the security holder. All else equal, a more stable stream of cash flow is more valuable than a more volatile one.

Cash flow growth +

Determining the growth profile of future cash flows goes hand-in-hand with addressable market sizing. This can entail cannibalizing business of incumbents, or opening up entirely greenfield opportunities.

Balance sheet intensity +

Cash is king, and businesses with more of it control their destiny better than those with less of it. Debt service ratios, cash burn rates, debt maturity schedules, rating agency opinions, leasing terms, CDS spreads, and other liquidity factors can be useful analysis tools.

Upside to intrinsic value +

Discounting our universal truth, cash flow to equity holders, to present day allows us to assess relative conviction across our opportunity sets.

Timing +

The ripeness of a catalyst reveal or a massively tilted consensus view that's facing imminent shift are examples of the timing factor.

Our team engages with endowments, family offices, pensions, foundations, and other exclusive institutions.

Michael Parker, CFA®

Partner, Chief Investment Officer

Kurt Grove, CFA®

Partner, Portfolio Manager

SWS Growth Equity

Our Flagship Public Equity Strategy

We see innovative disruptors—companies leading the charge to leverage insights from data in efforts to unlock profitable share gains—unfolding across every economic sector.

We also see these innovators disproportionately forming in growth than any other asset class. This led to the creation of our institutionally designed strategy, SWS Growth Equity, launched in May 2018. Its explicit objective: exploit the market’s inefficiency of identifying the platforms of the future.

Quarterly