Atlantic Capital Management
Location: Richmond, Va.
Principals: M. Bagley Reid, president and CIO; John L. Reifsnider, managing director
Year founded: 1998
Style: Small-cap and midcap growth equity manager
AUM as of June 30:
Small-cap equity growth fund:
Three-year annualized performance: -9.06%
Benchmark (Russell 2000 Growth): -16.67%
Three-year alpha: 4.31
Atlantic focuses on the smaller end of the growth equity spectrum, and uses the same strategy for both its small-cap and small-to-midcap growth funds; only the market cap of the stocks differ. For the small-cap, companies have capitalizations of $50 million to $1.5 billion; for the small-cap to midcap, $750 million to $10 billion.
"We use quant screens to help us find companies we might want to consider for our portfolios," said M. Bagley Reid. "We try to identify companies that are growing their revenues 15% and their earnings 20%, selling at reasonable valuations."
"We never bought Internet stocks because to be in our portfolios, companies need to be earnings-positive." Mr. Reid reduced technology in the fourth quarter of 1999 and overweighted health and energy. In the last six months, however, he increased technology and reduced consumer discretionary. Currently, the largest sector weighting in each portfolio is technology, followed by consumer and health care.
The firm started when the investment team, which had been managing small-cap portfolios at Scott & Stringfellow Capital Management, Englewood, Colo., did a friendly buyout and bought the small-cap assets.
Said Ted Price, chairman of the Sheltering Arms Hospital Foundation, Richmond, Va.: "We hired them to manage $2 million in a small cap strategy several years ago and their performance record has been great. ... Over time we gave them more money, which came to an additional $3 million. That $5 million has now grown to over $10 million."