A team of portfolio managers at SWS Partners, including two people who were formerly on the investment staff of the $102.4 billion Ohio Public Employees Retirement System, Columbus, are targeting institutional investor clients as the firm's flagship fund closes in on a three-year track record.
SWS Growth Equity fund was launched in May 2018, Michael Parker, CIO, partner and lead portfolio manager on the fund, said in an email.
The strategy has had "alpha consistency through two major corrections," in the fourth quarter of 2018 and the first quarter of this year, Mr. Parker said. The growth equity strategy seeks to "exploit (the) market's inefficiency of pricing long-term competitive distribution that's enabled by tech," he wrote.
Mr. Parker left Ohio PERS, where he was an equity portfolio manager, in October 2017. Kurt Grove, an SWS partner who co-manages the growth equity strategy, left the pension fund in May after having served as an investment analyst.
The strategy had $59.3 million in assets as of Nov. 30, according to fund materials provided by SWS. Year-to-date Nov. 30, the growth equity strategy had a net return of 47.4%, beating its benchmark, the Russell 1000 Growth Index, which returned 32.4% during the same period.
The firm's total AUM is "north of $250 million," primarily with high-net-worth and family office clients, Philip Kessler, co-founder and co-managing partner at SWS, said in a telephone interview.
"We want to be opportunistic in finding companies that are disruptive regardless of what is going on with the economy," Mr. Kessler said.
Mr. Parker said that the coronavirus pandemic created an environment that has "accelerated a lot of trends that otherwise would have happened over the next decade." SWS aims to understand what companies will outperform in the long term vs. just as a result of the environment caused by the pandemic.
A company in the fund's portfolio that has performed well is Twilio, "a roughly $40 billion market-cap company" that started as a messaging applilcation programming interface," Mr. Parker said. The messaging platform has provided a contactless way for those in the health care, consumer and automotive sectors to confirm when patients or customers arrive for appointments, he explained.
"We are thinking of the next generation of the cloud and Twilio is going to be a big part of that," Mr. Parker said.