Polen Capital Slide 1

A Concentrated Approachwithin a Global Universe

Polen Focus Growth

Our Focus Growth strategy seeks to achieve long-term growth by building a concentrated portfolio of primarily Large Cap U.S. common stocks that have sustainable competitive advantages. The strategy is available through Separately Managed Accounts (SMAs), UCITS and Mutual Funds which are all managed to Polen Capital's model portfolio, no matter their size.

Polen Capital manages SMAs for a variety of client types including endowments, sovereign nations, foundations, corporations, public funds and high-net worth individuals and families.

Investment Process

Since 1989, fundamental research has been the cornerstone of our Investment Process. The firm and each member of the investment team are focused on only one strategy: Growth Investing. Our experienced investment professionals execute our Investment Process with discipline, focus, and active management.

  1. Quantitative Metrics Screening: We begin the Investment Process by screening a stock universe of approximately one thousand companies to identify companies with strong balance sheets and little to no debt, high levels of free cash flow, ROE above 20 percent, stable to improving margins, better than average earnings growth and a proven track record.
  2. Paring the List: We then test for sustainability, eliminating companies that are highly cyclical or prone to fad or fashion.
  3. Active, In-depth Research: The universe is now down to about 100-125 companies. We assess industry dynamics and growth, identify competitive advantages, examine management, value free cash flow and evaluate risk. When a new idea is a strong candidate for the portfolio, then several members of the Investment Team research the company and meet often to discuss the opportunities as well as the risks of a possible investment.
  4. Portfolio Construction and Management: Once an investment idea has been fully researched and debated, our portfolio managers, Dan Davidowitz and Damon Ficklin together decide whether or not to add the company to the portfolio and if so, how much. The portfolio is constructed to target mid-teens earnings per share growth at fair valuations. As such, the portfolio's long-term return, should closely track the underlying earnings per share growth.

Risk Aversion

We look for financial strength and earnings sustainability that serves as a 'Margin of Safety,' allowing us to buy stocks at attractive prices relative to the long-term valuation of the underlying business. - Damon Ficklin, Portfolio Manager & Analyst

Risk Management is integral to our Investment Process. Conventional wisdom suggests diversification of assets reduces risk. The flaw in that strategy is that after a certain point of diversification, we believe you are more likely to introduce risk and reduce the growth potential of your investment as sub-par companies are added to the Portfolio. The wisdom is in knowing what you can control and what you cannot.

At Polen Capital, our growth managers control risk differently:

  • Building and managing a concentrated portfolio of high-quality companies with strong balance sheets and large competitive advantages
  • Focusing on the preservation of capital
  • Avoiding diversification into poor or marginal businesses
  • Establishing optimal position size and sector weight limits

We invest in only financially superior, competitively-advantaged companies that we believe will outperform the market over the long-term. Exceptional companies not only have the potential to contribute outsized returns but are also inherently less risky as their greater earnings stability offers a "Margin of Safety" that typically results in less volatility in declining markets.

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