Expertise & Collaboration
We work closely together to identify investment opportunities we believe are primed for long-term success and build concentrated portfolios of our best ideas.
Located: Boston, MA
Head of Team: Rayna L. Hannaway, CFA, Portfolio Manager & Analyst
Our Investment Philosophy
Concentrated Portfolio: High Active Share
Risk Management: Durable Businesses
Long Holding/Compounding Period: Time Arbitrage
Outcome Orientation: Absolute Return Mentality
Our Strategic Approach
Our team uses a distinctive Flywheel approach to select stocks. We focus on companies with specific characteristics we consider essential to long-term value generation. Each business we assess undergoes a rigorous research process and must meet all five of our Flywheel criteria in our view to be chosen as an investment.
This research framework helps us determine if the right conditions are in place to identify companies that we think are well-postioned to deliver significant value over a five-year period. The fulfillment of each Flywheel component is crucial to the long-term compounding potential of a business. It is our belief that once the Flywheel starts moving, it gathers momentum and begins to spin faster without incremental effort, growing stronger and longer than competitors. Conversely, if any part breaks down or stops, the Flywheel itself slows.
Small Company Growth Flywheel Framework Explained
We seek companies that offer infinite opportunities through long-term compounding, always in pursuit of great advantages for our clients.
The Polen Small Company Growth strategies are typically concentrated portfolios of what the team feels are the highest-quality growth names. Examples as of 03/31/2025 include:
EXL Service Holdings is a business process outsourcing company that has emerged as a leader in data and analytics. The company is seeing robust demand from customers seeking to clean, structure, and leverage data to navigate the next stages of digital transformation, including generative AI. At the same time, EXL is making significant investments to develop GenAI-enabled tools and has announced partnerships with Microsoft and Amazon Web Services to co-develop AI solutions and accelerate go-to-market initiatives.
Paycom is a cloud-native payroll and human capital management (HCM) software provider. As an industry leader, Paycom delivers mission-critical solutions in an attractive industry characterized by highly recurring revenue, 90%+ customer retention rates, and high returns on capital. We believe the company has a best-in-class product, which enables Paycom to continue outpacing market growth and successfully expand up-market. Since its founding in 1998 and IPO in 2014, Paycom has consistently gained market share—a trend we expect to persist well into the future. We also hold Paycom in Focus Growth, our large cap growth strategy, illustrating Polen’s common approach to seeking exceptional businesses with long growth runways.
AddTech is an industrial distributor and manufacturer based in Sweden. The company provides mission-critical parts to industrial customers globally. The company operates in narrow product niches where high technical competence is critical. Durable growth drivers are typically prevalent throughout the cycle, resulting in less volatility in operating performance than many industrial companies. AddTech's profits have doubled every five years through organic and inorganic growth, which we anticipate can continue.
These stocks were selected as representative holdings due to their large relative size in our Portfolios at the time of selection and their alignment with our investment philosophy.
Our Team
An Experienced, Research-Driven Team
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Recent Perspectives
Thought CapitalWe believe high-quality small caps have what it takes to emerge even stronger from a challenging environment.
Polen Capital Management, LLC is an independent registered investment advisor.
The information is provided for illustrative purposes only. Opinions and views expressed constitute the judgment of Polen Capital as of the period indicated , may involve a number of assumptions and estimates which are not guaranteed, and are subject to change without update. Although the information and any opinions or views given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness or accuracy. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without update, including any forward-looking estimates or statements which are based on certain expectations and assumptions. The views and strategies described may not be suitable for all clients. This information does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction.
Holdings are subject to change. The holdings, as well as other data, are as of the period indicated and should not be considered as a recommendation to purchase, hold or sell any particular security. There is no assurance that any of the securities noted will remain in a portfolio at the time you review this information. Actual holding and percentage allocation in individual client portfolios may vary and are subject to change. The securities discussed do not necessarily represent the entire portfolio. It should not be assumed that any of the holdings discussed were or will prove to be profitable or that the investment recommendations or decisions we make in the future will be profitable. A list of all securities held in this portfolio in the prior year is available upon request. Past performance does not guarantee future results and profitable results cannot be guaranteed.
Active Share: is a measure of the percentage of stock holdings in a manager's portfolio that differs from the benchmark index. "Weighing Machine vs. Voting Machine": In the short term, the market might be swayed by various factors like news and sentiment, and act like a “voting machine” or a popularity contest. Long term, the market will factor in the fundamentals and act like a weighing machine, and primarily reflect the corporate earnings trajectory.