Granite Investment Advisors
Location: Portland, Ore.
Principals: Dean Kirkland, president; Ken Thomas, vice president; Roger Thomas, chief investment officer; Connie Kristensen, compliance officer
Style: Small-cap growth
AUM as of June 30: $117 million
Three-year annualized performance: -2.33%
Benchmark (Russell 2000 Growth): -16.7%
Three-year alpha: 18.52
Granite investment Advisors was formed by the investment team from Capital Consultants LLC in Portland, which closed in 2000 after Jeffrey Grayson, the chief executive officer, was indicted on charges of defrauding clients and filing false tax returns.
Roger Thomas, Granite's CIO, said the team uses the same investment strategy employed at Capital: "We target growth-oriented stocks in a focused portfolio, of no more than 25 to 35 stocks, which we hold for the long term. We look for growth at a reasonable price in companies with market caps of between $100 million and $2 billion."
Granite uses a bottom-up approach to find businesses it believes have a sustainable competitive advantage; it looks for quality management and free cash flow available for funding its growth prospects. Portfolio managers like the health-care, technology and general manufacturing sectors.
"I like them for their strong performance. (CIO Roger Thomas) is the best stock picker around ... he invests your money as if it's his own," said Clark Knauss, president of Lucky Concrete Corp., Reno, Nev., which is a client of Granite. "Most of these people are just a dime a dozen, and in it for the money, but he's not."