RADNOR, Pa. - Radnor Capital Management is gaining new clients thanks to passing its five-year milestone, and the equity and balanced manager is looking to exploit that opportunity to expand its institutional asset base even further.
Last year, the firm started seeing more interest in the part of large national consulting firms, which helped the firm break through to the large pension market and double its assets to more than $1 billion. Radnor Capital ended 1994 with $485 million under management, then added $340 million from new advisory clients and another $50 million in wrap-fee assets during 1995.
With the firm having five-year performance numbers, consultants began showing Radnor to their pension fund clients, said J. Allen Gray, vice president.
The firm received an assignment to the emerging manager program of the Los Angeles County Employees' Retirement Association and reached the finals in a search carried out by the Los Angeles Fire & Police Pension System. The LACERA assignment came through Radnor's link with RCB Trust Co., Radnor's only emerging manager affiliation.
Radnor Capital opened officially in January 1990 and has more than $1 billion under management: $105 million in wrap-fee assets, approximately $430 million in individual assets and the remainder in institutional assets. Institutional clients include many charitable and medical organizations in Pennsylvania, as well as pension plans including the St. Petersburg (Fla.) Pension Funds and the pension fund of C&J Clark America Inc., Kennett Square, Pa.
Radnor Capital is rolling out a new small-cap value product June 1 that will be managed by Douglas Pyle, one of the former partners in Cashman Farrell & Associates. Mr. Pyle joined Radnor April 8.
The new strategy will invest primarily in established companies with market capitalizations of less than $1 billion using the same bottom-up low-price-earnings discipline as in Radnor's all-cap portfolios, said Mr. Pyle; he estimated the average market cap of the companies will be around $500 million. Radnor Capital already has a commitment from one client for a $4 million allocation to start, said Mr. Gray.
Radnor's staff already was researching many of the same companies for its all-cap portfolios, so the small-cap portfolio was a natural evolution, said President and CIO Maris A. Ogg.
The firm focuses on diversified low p/e portfolios holding 30 to 40 stocks with no more than 10% in any one sector.
Last year was a difficult one for the firm, but it managed to return 17.5% in a tough market for value managers, said Mr. Gray.
