On a recent trip to Chicago, during which he had to contend with major flight delays, Chris Colarik, portfolio manager for Philadelphia-based Glenmede Investment Management’s Small-Cap Equity strategy, was dismayed to find that because he hadn’t flown in such a long time, he could no longer avail himself of the privileges U.S. Airways offers its frequent fliers.
That caused some momentary discomfort, of course, but in the grander scheme of things, Colarik didn’t mind at all.
“The successful performance of our product means that we haven’t had to go out on the road to market it,” he said. “We sowed all the seeds and now all we really need to do is follow up.”
Colarik—who has been with Glenmede since 2001—co-manages the Glenmede Small-Cap Equity strategy with lead portfolio manager Bob Mancuso, who’s been leading the team since 1993. The duo manages a total of $1.8 billion in the strategy, of which $500 million is split between SMA and UMA accounts. Both men are invested in the strategy that they manage.
Colarik credits the success of Glenmede’s $1.8 billion Small-Cap Equity product (which over the past decade has steadily outperformed the benchmark Russell 2000 index) to consistency, discipline and “never wavering from our core strategy.”
Getting the best out of the small-cap equity space means thinking long term, Colarik said, and that means tuning out the daily, weekly and even quarterly noise and assessing companies in an in-depth manner over the course of a complete market cycle.
As a firm, Glenmede, named SMA Manager of the Year in the small-, SMID- and mid-cap category, believes in diversifying across sectors, industries and individual securities, and combining that with an emphasis on quality. The firm sorts its universe of 3,500 stocks into eight economic sectors and ranks them according to their valuation; growth and profitability; earnings and company-specific catalysts; and market confirmation of price momentum. Those stocks that rank in the top 20% of each sector and that are either in the Russell 2000 or have less than $2.75 billion in market capitalization then form Colarik’s “buy list” of about 400 names to choose from.
“Whatever name we want, we’ll pick from this opportunity set,” he said. “It’s ramped every night, and when we decide to make a change to sector weights or investment themes, we will go to this list to look for replacements.”
He highlights the importance of what he calls the “point/counterpoint” factor in objectively choosing the best names for the buy list.