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Special report

Matarin’s journey a chronicle of promise

Nilizandr E.M. Gilbert, left, and Marta Z. Cotton see many prospects in Matarin’s pipeline.

Matarin Capital Management LLC is something of a quintessential woman-owned emerging manager: The investment team's pedigree is good, the three-year track record of the firm's main investment strategy is good, and money is trickling in rather than rushing in.

Core investment team members at the Stamford, Conn., firm worked together at Invesco (IVZ) Ltd.'s global quantitative strategies group for more than 10 years before striking out on their own in 2010.

Now the firm's assets under management total $275 million, of which $255 million is managed in long-only strategies that build fundamental equity and asset allocation factors into a quantitative portfolio. The other $20 million is managed in a long/short equity market neutral hedge fund.

“The model forecasts future market cycles for value or momentum stocks and weights the portfolio accordingly. We describe it as a tactical core approach,” said Nilizandr “Nili” E.M. Gilbert, co-founder, principal and portfolio manager.

Returns of the firm's 4-year old North America small-cap strategy have been good. For the year ended Dec. 31, the strategy returned 10.7%, outperforming its benchmark, the Russell 2000 index, by 581 basis points. The annualized three-year return was 22.3%, topping the index by 308 basis points. Returns for the Matarin hedge fund for periods ended Dec. 31 were one year, 4.5%, and three years, an annualized 0.73%. Performance information is from the eVestment LLC database.

In the long-only strategy, investors include seven public pension funds, one corporate fund, one insurance company and two high-net-worth individuals. The hedge fund has 12 investors, two of which are public pension funds that are invested through hedge fund-of-funds managers, said Marta Z. Cotton, principal and director of client development.

Matarin Capital also was fairly typical in getting its initial funding for its long-only equity strategies from the firm's principals, Ms. Cotton said. The hedge fund still has a fairly high level of investment from friends and family, but it is gradually attracting more institutional investors.

“But we've been turning out good performance and now that we've passed the three-year track record criteria, we've been attracting more institutional assets and our pipeline looks pretty strong,” Ms. Cotton added.

This article originally appeared in the February 23, 2015 print issue as, "Matarin's journey a chronicle of promise".