ranahan Investment Management is an independent, 100% employee-owned firm that was founded in 1985 by investment professionals with a passion for small capitalization equity investing. The three founding principals, Jack Granahan, Gary Hatton and Jane White, remain committed to the smaller cap area of the market and have dedicated their investment expertise to serving institutional plan sponsors and family offices. Granahan Investment Management (GIMI) believes that earnings drive stock prices, and that small dynamic companies with exceptional growth prospects provide the greatest potential for superior long-term performance. Over time, active management of the smaller cap sector has outperformed a passive approach. GIMI believes this is because the smaller cap area of the market is not as well followed by the investment banking community; therefore, opportunities to “discover” companies when they are not fully valued are more abundant. A bottom-up, fundamental approach to research is the only method that can both uncover and appropriately value stocks in the small cap arena.
The firm has grown to over $3 billion in assets under management and the investment team has grown accordingly, now totaling ten professionals. The firm maintains its focused, dedicated and consistent approach to investing, highlighting an investment process that has been honed and proven for over 28 years.
The Granahan Small Cap Focused Growth strategy invests in companies using a bottom-up approach to research and analysis, and combines this with a strict risk/reward and expected return discipline for selecting stocks and managing the portfolio. The portfolio holds approximately 40 stocks of some of the most exciting and innovative companies in the economy. The strategy for Focused Growth, and the consistent risk-adjusted returns for this product, can be summarized by:
- Investing in companies capable of sustaining 15%+ growth
- Focusing exclusively on companies operating in areas of the PM’s core competency
- Adhering to a disciplined risk/reward and expected return methodology, which encompasses understanding and quantifying downside risk
The Focused Growth product was born out of the portfolio manager’s experience and belief that the best way to add value for clients is to focus exclusively on areas of core competency – a belief equally held at GIMI since inception of the firm. The strategy has a focus on companies with market capitalizations between $200M and $2Bn in the portfolio manager’s areas of expertise: Consumer, Technology Services, Internet and Business Services.