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Money management

Polen Capital wants to go global with its large-cap growth equity strategy

Stan Moss
Stan C. Moss thinks global growth is an attractive place.

Domestic equities specialist Polen Capital Management LLC is looking to launch a global strategy, the first in its 25-year history.

Since its formation by David M. Polen in 1989, Polen Capital has had only one investment strategy: active domestic large-cap growth equities. Now, roughly a year and a half after the passing of its founder, the Boca Raton, Fla.-based money manager is in the planning stages of a global version of its U.S. offering.

“We believe our process and investment philosophy can be applied to global growth,” said Stan C. Moss, CEO of Polen Capital, in a telephone interview. “We also think global growth is an attractive place to go.”

The firm is searching for a portfolio manager to run the in-the-works global growth strategy, although Mr. Moss declined to offer many details on a timetable.

The new effort comes at a time when the firm experienced meteoric growth in its institutional assets under management. At the end of 2013, Polen's total AUM was $5.02 billion, up 11% from a year earlier and a staggering 111% from Dec. 31, 2011. The firm's institutional AUM was $2.39 billion as of Dec. 31, up 17% from the year before and a whopping 121% from two years prior.

Despite experiencing considerable AUM growth and nothing but net inflows throughout 2012, 2011, 2010 and most of 2009, Polen saw primarily net outflows in 2013 (net outflows of $145.55 million in the fourth quarter, $336.06 million in the third and $128.91 million in the second, with net inflows of $199.86 million in the first quarter). So it seems the time is right to go global.

In an e-mail, Mr. Moss said the outflows came primarily from high-net-worth investors within the firm's wirehouse platform and did not play a role in the strategic decision to develop a global strategy.

Anthony Xuereb, Polen Capital's institutional client and consultant relations and client service, in an e-mail, attributed the leap in assets since 2011 to the firm making a concerted effort to grow its institutional client base in 2012 and winning several large mandates from public and corporate pension funds that year. Mr. Moss noted that the year-over-year increase in AUM offset the firm's net outflows in 2013.

Polen's move also is part of the globalization of the industry. “Globalizing portfolios and products is a secular trend well underway in the market,” according to an annual study released this month by Marietta, Ga.-based eVestment LLC and Darien, Conn.-based Casey, Quirk & Associates. “Asset managers need to explore globalizing their clientele,” the study said.

The joint study, “A Tailored Approach: Positioning to Outcome-Oriented Global Investors,” added that global equities will benefit from the long-term trend away from both home-biased portfolios and domestic equity mandates.

Because of this growing trend, many U.S.-based money management firms, like Polen, are looking to take advantage of the fact that many overseas institutions are abandoning any type of home-country bias.

“When you think about where flows are headed in the next five years, flows into the U.S. domestic equities market are stagnant, while flows outside the U.S. are positive,” Mr. Moss said. The data from eVestment seem to confirm this.

Polen has also added to its sales team, doubling it to 10 people from five over the last three years. Currently, the firm has a total of 27 employees, with five people (including Mr. Moss) on the institutional team.

To accommodate its staff growth — and also to entice new recruits to join the firm — Polen moved into a substantially larger and “green” office late last year.

“We significantly outgrew our old space,” Mr. Moss said about the move. “So we looked at (the offices of) Apple and Google and used the best of both worlds from the offices for a tech company and an asset manager.”

Mr. Moss added that Polen wanted the office to help increase productivity and well-being as well as entice people to want to stay there.

Mr. Moss offered no ETA on the launch of the new strategy or the hiring of the portfolio manager. “It'll take as long as it'll take,” he said, adding Polen executives want to ensure the hired person is a good fit with the firm philosophically and culturally.

In the meantime, in 2013 Polen launched an offshore version of its large-cap growth strategy through an undertakings for the collective investment of transferable securities vehicle, which is marketed to investors outside the U.S. 