Timeless Investment Management
Principals: Mike Wolcott, managing principal and chief investment officer; Gary Kauppila, principal
Style: Small-cap equity manager
AUM as of June 30: $169 million
Three-year annualized performance as of June 30: 18.7%
Benchmark (Russell 2000): -3.3%
Three-year alpha: 5.68
Timeless' sole client, the $149 billion California Public Employees' Retirement System, Sacramento, is responsible for the firm's creation. The company was launched last year after being chosen as one of the 10 emerging managers to participate in CalPERS' manager development program. Mike Wolcott and Gary Kauppila made the connection with CalPERS through Strategic Investment Group, Arlington, Va., which was assisting the pension fund on manager selections.
"Gary and I had been managing the same small-cap equity portfolio at Chicago Asset Management," recalled Mr. Wolcott. "We collaborated on a business plan, sent it to Strategic, and the day after we were selected, we started Timeless." Strategic and CalPERS, through a joint venture, took a 50% stake in Timeless and provided startup capital.
CalPERS gave the firm $150 million to invest, which has grown to $169 million. Recently the firm has been marketing to other clients, and will close its small-cap fund once assets reach $1 billion, Mr. Wolcott said.
The emphasis is on high-quality businesses whose shares are undervalued, and whose management teams are exceptional. Timeless uses a bottom-up approach to find these companies for a concentrated portfolio of 30 to 40 companies. Top holdings include Apogent Technologies Inc. and Sybron Dental Specialties Inc.
Hilda Ochoa-Brillembourg, president and chief executive officer of Strategic Investment Group, praised Timeless for adding value over its benchmark. "Its competitive advantage is its research-intensive approach that utilizes a sophisticated discounted cash flow valuation methodology to identify high-quality businesses that can offer the highest potential return," she said.