(Jennifer Dunne, international portfolio manager and senior analyst at Cambiar.)
2012 International Equity Manager of the Year, No. 2:
Cambiar Investors LLC
International ADR Portfolio
This is an expanded profile of one of Investment Advisor-Prima Capital's 8th annual Separately Managed Account Managers of the Year. View the complete article with all the winners here. Read about the process of choosing this year's winners here.
Platform shoes and leisure suits quickly faded (thank God), but one other product of the '70s, Cambiar Investors, founded in 1973, has withstood the test of time, much to the delight of its clients.
“You don’t have to find every single great stock out there,” says Jennifer Dunne, the firm’s international portfolio manager and senior analyst. “But if you put one in the portfolio, it better go up.”
The Denver-based boutique firm is 100% employee-owned with roughly $7.5 billion in assets under management. The inception of the ADR portfolio (for which it won the award) was February 2006. The International Equity Fund was launched in 1997 as a trust and converted to a ‘40 Act fund in 2002. Currently, the ADR overlaps the international fund by 100% (the fund owns two additional names). More impressively, the global investment team averages 18 years experience for each of its 10 analysts.
“Our president, Brian Barish, was the driving force behind the launch of the international strategy,” Dunne adds. “We are all sector specialists. We don’t rotate; we stay focused on our areas of expertise, which translates to a tremendous amount of trust when it comes to the insight and recommendations we offer.”
Cambiar’s single investment philosophy, according to Molly Cisneros, the firm’s senior vice president, is to find relative value across multiple asset classes.
“However, we’re not out there buying cheap for cheap’s sake,” Cisneros stresses. “We also look for high-quality companies, a quality and experienced management team and low amounts of debt. We feel that last point kept us out of the problems that plagued so many of our competitors in the past few years.”
The team’s inflection point is one with a one- to two-year time horizon. During the period the position is held, they expect 50% (yes, 50%) of total return—roughly 40% of appreciation combined with roughly 10% of dividend distributions.
“We ask ourselves why a particular valuation is compressed,” Dunne says. “Is it structural or transitory? This is where the experience comes in.”
The point, she concludes, is to have a very analyst- and research-based process.
“We have between 40 and 50 stocks in the portfolio,” Dunne says. “Lots of stocks go up 20% or 30%, but our 50% hurdle really concentrates the mind, and that’s something that separates us.”
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