Location: Jacksonville Beach, Fla.
Principals: Dean McQuiddy, CIO; Andrew Cantor, chief of fixed income; Brian Monroe, director sales and marketing
Style: Large-cap growth and broad market fixed-income
AUM as of June 30: $1.06 billion
Large-cap growth equity
Three-year annualized performance: -7.37%
Benchmark (Russell 1000 Growth):
Three-year alpha: 4.16
Broad market fixed income
Three-year annualized performance: 10.16%
Benchmark (Lehman Brothers Aggregate): 10.40%
Three-year alpha: 0.30
When sawgrass was launched by Dean McQuiddy, Andrew Cantor and Brian Monroe in 1998, "we had no assets or clients, just good intentions," recalled Mr. McQuiddy. But they had a track record of managing money as a team at Barnett Capital Advisors, Jacksonville, Fla., dating to 1983.
Barnett Bank, the parent company, was bought by NationsBank, Charlotte, N.C. at the end of 1997 and the three principals decided it was time to fulfill their dream of owning their own firm. "We knew Barnett would get bought out eventually and we planned to go into business for ourselves when that happened, even though we could have gone to Charlotte with Barnett," Mr. McQuiddy said.
The team that came over from Barnett included the three principals and five investment professionals; several clients followed. "We started with $180 million and crossed the $1 billion mark in two years," Mr. McQuiddy noted.
The large-cap growth portfolio focuses on stocks with high-quality earnings. It buys profitable companies whose earnings are growing faster than the market that are selling at reasonable valuations, around 15 to 20 times earnings. Currently he likes Dell Inc., Motorola Inc. and Merrill Lynch & Co. Inc.
The fixed-income fund also focuses on high-quality issues. "We don't use any high yield, and only use corporate bonds with ratings of A, AA or AAA," said Mr. McQuiddy.
"We like them because the partners are experienced, have been together a long time and … their focus is on the client; their interests are aligned with the clients," said Bruce Graham, president of Shields Associates, Stamford, Conn. "I have a lot of confidence in their integrity, and integrity is a big thing right now."