Loading...
HomeMy WebLinkAbout2009 02 17 Regular 600 Anchor Capital PresentationDate: February 17, 2009 ATTACHED PRESENTATION EMAILED AND MAILED TO BOARD MEMBERS PRIOR TO MEETING WAS THE THE V Investment Presentation for City of Winter Springs General Employees Pension Plan February i7, 2009 William P. Rice President, CEO Anchor Capital Advisors LLC (61'7 338-3800 Robert E Croce Senior Vice President Anchor Capital Advisors LLC (61'7) 338-3800 Table of Contents Our Firm Page 2 Investment Philosophy Page 4 Investment Process Page 5 Portfolio Characteristics Page 8 Performance Page 10 The Difference Page 13 Biographies Page 14 Disclosures Page 19 u Anchor Capital Advisors LLC i Our Firm Anchor Capital Advisors was founded in 1983 to provide professional investment counseling services to individuals, corporate and retirement accounts, Taft-Hartley funds, public u funds and charitable organizations. .r 1'he firm is registered with the Securities and Exchange Commission and rs a bonded fiduciary under EKLSA. Anchor Capital operates through two divisions: the Anchor' Discretionary Managed Accoiu2t Division ("ADMA "), and the Anchor Separate Mm2aged Account Division ("ASMA °). The ASMA Division does not claim GLPSOcon~plimice. On June 1, 2006 Boston Private Financial Holdings, a holding compafTV, purchased an 80c1o e~~uity interest in Anchor Capital 4dvisors LLC. The conrpar?y's employees continue to retanT a 20% interest. 2 Anchor Capital Advisors LLC Our Firm December 31, 2008 Founded: 1983 Location: Boston, MA Professional Staff: 9 Firm Assets Under Management: Discretionary Managed Account Division Assets Separate Managed Account Division Assets* All Cap Assets Under Management: All Cap Discretionary Managed Account Division Assets All Cap Separate Managed Account Division Assets* u This is supplemental to the attached presentation. The ASMA Division does not claim GIPSO compliance. 3 $ 1.59 Billion $ 3.56 Billion $283.06 Million $ 29.05 Million Anchor Capital Advisors LLC Investment Philoso u Anchor's investment philosophy is to strive to achieve superior returns over time in a conservative and prudent manner. We believe that capital preservation is as important as capital appreciation in achieving long term investment success. Anchor Capital Advisors LLC 4 Investment Process The objective of our process is to identify investment opportunities which are undervalued, have moderate downside risk and a reasonable probability of above average total return. • Value Driven • Quantitative Screening & Modeling • Fundamental Research /Bottom-Up Analysis • Up & Down Side Review Prices /Sell Discipline • Team Approach u Anchor Capital Advisors LLC 5 Investment Process: Buy Discipline Investment Committee Rev iew u Anchor Capital Advisors LLC Sell Discipline u We formulate a timely decision on whether to hold or sell each security on a regular systematic basis. • Achievement of price targets • Negative changes regarding company • More attractive alternatives Anchor Capital Advisors LLC 7 All Cap Value Portfolio Characteristics As of December 3l, 2008 Anchor Capital Russell 1000 Value P/E Trailing 10.80x 12.90x Future EPS Growth Rate 10.00 °Io 8.00 % Dividend Yield 2.80% 4.00% Median Market Capitalization $14.03 B $2.78 B Portfolio Holdings 50 654 u * This is supplemental to the attached investment return information. Please see Disclosure Information on pages 19-20 of this presenla[ion. Anchor Capital Advisors LLC 8 All Cap Value Portfolio -Sector Breakdown As of December 3l, 2008 Utilities 16% u Other 2% Technology 5% Consumer Discretionary 10% Consumer Staples 8% * This is supplemental to the attached investment return information. Please see Disclosure Information on pages 19-20 of this presenla[ion. 9 Financial Services 21% Anchor Capital Advisors LLC Health Care Producer Durables Energy 19% 1% Materials 12% 6% Performance Annualized Returns Periods Ending December 3l, 2008 ~n of u 0% -10% -20 -30 -40 Quarter to Date One Year Three Year Five Year Seven Year Ten Year ^ Anchor All-Cap (Gross) -18.50% -26.72% -1.65% 3.84% 4.50% 5.04% ^ Anchor All-Cap (Net) -18.64% -27.23% -2.32% 3.11 % 3.74% 4.27% ^ Russell 1000 Value" -22.18% -36.85% -8.32% -0.79% 0.78% 1.36% .r Past performance is not a guarantee of future results. Inherent in any investment is the possibility of loss. Sce Disclosure Information on pages 19-20 of this presentation. ` ~ The Russell 1000 Value index offers investors access to the lar~~e cap value segment of the US equity universe. The Russell 1000 Value index is constructed to provide a comprehensive and unbiased barometer of the lame cap value market. Based on ongoing empirical research of investment manager behavior, the methodology used to determine value probability approximates the aggre~~atc large cap value manager`s opportunity set. Anchor Capital Advisors LLC ~o Performance Yearly Returns Periods Ending December 3l Gnoi 40 30 20 10% 0% -10 -20 -30 -40 -50 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 ^ Anchor All-Cap (Gross) 42.32% -8.12% -8.11% -15.50% 33.41% 14.33% 10.98% 16.49% 11.45% -26.72% ^ Anchor All-Cap (Net) 41.31% -8.82% -8.82% -16.16% 32.36% 13.49% 10.20% 15.69% 10.69% -27.23% ^ Russell 1000 Value" 7.36% 7.02% -5.60% -15.53% 30.02% 16.49% 7.05% 22.25% -0.17% -36.85% u '~` Past performance is not a guarantee of future results. Inherent in any investment is the possibility of loss. See Disclosure Information on pages 19-20 of this presentation. The Russell 1000 Value index offers invcstols access to the large cap value; segment of the US equity universe. The Russell 1000 Value index is constructed to provide a comprehensive and unbiased barometer of the huge cap value market. Based on ongoing empirical research of investment manager behavior, the methodology used to determine value probability approximates the aggregate large cap value manager's opportunity set. Anchor Capital Advisors LLC ii Performance 5 Year Risk vs. Return~~ Periods Ending December 3l, 2008 6% 4% ~ 2% m m Y 0% -2% 8 10 12 14 16 Standard Deviation u 18 >r Past performance is not a ~*u~uantee of luturc results. Inherent in any investment is the possibility of loss. See Disclosure Information on pages 19-20 of this presentation. .r"' This data is provided as supplemental information. '~ The Russell 1000 Value index offers investors access to the large cap value segment of the US equity universe. The Russell 1000 Value index is constructed to provide a comprehensive and unbiased barometer of the large cap value market. Based on ongoing empirical research of investment manager behavior, the methodology used to determine value probability approximates the aggrc~~ate lar«c cap value manager`s opportunity set. 12 • HncnorHU-c;apvaiue(Uross ^ Anchor All-Cap Value (N et) • Russell 1000 Value Anchor Capital Advisors LLC Anchor Capital LLC The Difference People Philosophy ~ Process ~ Experience Performance u Anchor Capital Advisors LLC i3 Biographies William P. Rice President Education Kenyon College, B.A., cum laude, 1966 Professional Background 1983 Founded Anchor Capital 1977- 1983 Fort Hill Investors Management Corp. 1969- 1977 Endowment Management & Research Corp. 1966 - 1967 Spencer Traslc & Company Other Associations Member, AIMSE Boston Security Analysts Society CFA Institute International Foundation of Employee Benefit Plans Investment Committee and Trustee of Donations, The Episcopal Diocese of Massachusetts President, Anchor/Russell Capital Advisors, Inc. Trustee, Albert O. Wilson Foundation Trustee, Anchor Venture Trust Trustee & Vice President, Duxbury Rural & Hist. Society Trustee, U.S.S. Constitution Museum u Mark V. Rickabau~h, CFA Executive Vice President Chief ln>>esrn2ent Officer Education Purdue University, B.S., Electrical Engineering, 1963 University of Pennsylvania, Wharton, MBA 1969 Chartered Financial Analyst, 1975 Professional Background 1985 Joined Anchor Capital 1980 - 1984 Fort Hill Investors Management Corp. 1969 - 1980 Smith Barney, Harris Upham & Co. 1965 - 1967 IBM Corporation 1962 - 1965 United States Navy Other Associations Boston Security Analysts Society CFA Institute International Foundation of Employee Benefit Plans Finance Committee, Nichols House Museum i4 Anchor Capital Advisors LLC Biographies Robert F. Croce Senio~° Vice President Director of Marketing POY'tfOhO Maj2ager Frlnratinn Suffolk University, B.A., 1961 Professional Background 1986 Joined Anchor Capital 1973 - 1986 Fort Hill Investors Management Coip 1971 - 1973 Bounty Management Corporation 1961 - 1971 Kidder, Peabody & Co., Incorporated Other Associations Board of Overseers, Walnut Hill School Former Trustee & Treasurer, Walnut Hill School International Foundation of Employee Benefit Plans u Stephen Mead, Jr., CFA First Vrce P~°esident Senior Financial Analyst Frinratinn Harvard College, B.A., cum laude, 1975 University of Pennsylvania, Wharton, MBA 1983 Chartered Financial Analyst, 1986 Professional Background 1986 Joined Anchor Capital 1983 - 1985 Wellington Management Company 1975 - 1981 Citibank North American Banking Group Other Associations Board of Overseers -Boys & Girls Clubs of Boston Board of Corporators -Brookline Savings Bank Boston Security Analyst Society CFA Institute 15 Anchor Capital Advisors LLC Biographies Charles A. Austin III Senior Vice President Portfolio Manager Education Lehigh University, B.A., 1957 Professional Background 2001 Joined Anchor Capital 199 - 2001 Appleton Partners, Inc. 1966 - 1990 State Street Research & Management Co 1960 - 1966 Price Waterhouse & Co. 1957 - 1960 United States Navy Other Associations Trustee, Evergreen Family of Mutual Funds Trustee, Arthritis Foundation, Massachusetts Chapter Director, The Andover Companies Director, Francis Ouimet Scholarship Fund Member, American Institute of CPA's Member, Massachusetts Society of CPA's u Charles G. Pohl Senior Vice President Portfolio Manager Education Bowdoin College, B.A., 1983 Professional Background 2002 Joined Anchor Capital 1983 - 2001 Putnam Investments 1983 Allen and Company Other Associations CFA Institute Boston Security Analyst Society Finance Committee, Town of Weston, MA Bowdoin College: Alumni Council; Capital Campaign & Special Gifts Chair; Class Agent Board of Directors, North Avenue School, Weston, MA Weston Community Children's Association i6 Anchor Capital Advisors LLC Biographies William J. Hickey Vice President Financial Atu~lvst Education Holy Cross, B.A., 1986 Pepperdine University, M.B.A. 1991 Professional Background 1995 Joined Anchor Capital 1993 - 1995 Banque Paribas 1991 - 1993 Oppenheimer & Co., Inc. 1987 - 1989 The Boston Company Other Associations Board of Directors, Wildlife International Network, Inc., Orlando, FL u David J. Watson Vice President Financial Analyst Education Lehigh University, B.S., 1985 University of California, M.B.A., 2000 Professional Background 2001 Joined Anchor Capital 1996 - 2000 AMA Consulting, Inc. 1993 - 1996 CIMCO Medical, Inc. 1988 - 1993 Allied Industries, Inc. 1985 - 1988 Singer Company-Aerospace Division, Inc. i~ Anchor Capital Advisors LLC Biographies William P. Rice, Jr. Vice President Financi~il Ancrlvst Education Georgetown University, B.S., 1998 Tuck School of Business at Dartmouth, M.B.A., 2005 Professional baclcaround 2005 Joined Anchor Capital 2000 - 2003 J.P. Morgan 1998 - 2000 Robertson Stephens Other Associations Member, Boston Security Analysts Society Georgetown University Alumni Admissions Interviewer Tuck Annual Giving Chair, Class of 2005 Trustee, Albert O. Wilson Foundation Overseer, USS Constitution Museum Member, Mayor's Young Bostonian Advisory Council 2005-2007 u Anchor Capital Advisors LLC i8 Anchor Capital Advisors LLC Notes to Investment Performance Statistics of Anchor Capital All Cap Composite For the period from January i, i998 through December 3i, 2008 1. FIRM DEFINITION Anchor Capital Advisors LLC is a Registered lnvesunent Advisor and operates dm~ough two divisions: the Anchor lliscretionary Managed Account llivision ("AllMA"j, and die And~or Separate Mana,ed Account llivision (`'ASMA"j. The redefinition of the hrm into the AllMA and ASMA llivisions occurred as of 2003. The hrm was redefined in 2003 to assure compliance with (then) A1MR performance reporting standards. Yor GIPS purposes, the firm is defined as the AllMA llivision of Anchor Capital. On June 1, 2006 Boston Yiivate Financial holdings, a holdin~~ company, purchased a^ 809c equity interest in Anchor Capital Advisors LLC 'f~hc company's employees continue to retain a 20%. interest. 'f~hc firm specializes in mana~~m, equity, balanced, and fixed income portfolios for institutional and individual dicnts. 2. DESCRIPTION OF ACCOUNT INVESTMENT OBJECTIVE l~hc performance results displayed herein represent the pcrfonnancc of the All-Cap Value Composite managed by Anchor Capital Advisors LLC AllMA Division. The All-Cap Value Composite was created on December 31, 2002, reu~oactivcly as of January 1, 1994. For all years the composite includes all discretionary accounts with assets exceeding 525Q,000, and those accounts were invested primarily in All-Cap Value stocks (not including accounts which are in the Small-Cap, Mid-Cap, or Large-Cap disciplines). Accounts may include up to 1290 of fixed income investments. As a whole, fixed income securities represent less tha^ Igo of total composite assets. 3. CALCULATION OF RATES OF RETURN All securities arc valued at last sale price as provided by pricing, services. The portfolio valuation is based on a trade date basis net of commissions. 'fhe accrual of interest income is added to the beginnin, and ailing market value. 'I~he currency used to express performance is the U.S. dollar. 'the time-wei~,hied returns are calculated on an ~~cragc-weighted basis for each monthly period in the preceding quarter. Quarterly composite results arc linked to determine am~ual returns. 'fhc Russell 1000 Value Indices excludes fees and commissions. Returns of individual clients' accounts may differ from composite returns because of different investment objectives, different tax status and other considerations. Returns of individual clients' accounts will be reduced by investment advisor's fees, custodial service Ices (if any) and other expense which might be incurred to provide investment management custody, administrative, actuarial, accountin, or other services to the client. Investment advisory Ices charged by Anchor Capital Advisors arc described i^ Part Il of Form All V, and a document with all informatio^ contained in that filing is provided to all of Author Capital Advisors' clients. Gross returns arc calculated before management fees, custodial fees and, in some ca,aes, applicable withholding taxes paid (depending on the custodian and how such transactions are coded and transmitted to us in the custodian's data feed), but alter u~aasactio^ costs, brokerage commissions and wrap Ices, where applicable. Net returns arc calculated before custodial fees and, in some canes, applicable withholdin, taxes paid (depending on the custodia^ and how such transactions are coded and u~ansmiued to us i^ the custodian's data feed), but after managcmcnt fees, u~ansactio^ costs, broku~a,e commissions and wrap fees, where applicable. Additional information regarding policies for calculaten, and repo~ling returns is available upon request. 4. DISPERSION METHOD lutcrual dispersion is calculated usin, the equal-wei~,hted standard deviation of all portfolios included in the composite for the entire yev~. ~. GLOBAL INVESTMENT PERFORMANCE STANDARDS COMPLIANCE (GIPS) In compliance with GIPS, Anchor Capital Advisors LLC AllMA llivision prepares statistics for the All-Cap Value Composite (o^ a quarterly basis) which includes toga] dollars represented i^ the managed accounts included iu that composite at the cud of the quarter, the number of accounts represented in the composite which share anmparablc investment ~,uidelincs and risks, the number of dicnt accounts in that composite, the ava age account size and median account size. All this data is available upon request The table below contains extracts of this data as of the most recent reporting period. Portfolios below 5250,000 and portfolios with restrictions arc excluded fi~om the All-Cap Value Composite. if a client makes a si~,nificaut withdrawn] causiu~, the portfolio value to fall to 2090 below the minimum asset value iin~ the composite, or if the withdrawal represents a 209c drop li~om the account's value at the beginuin, of the quarter, it will be excluded li~om the composite. if a 20°/n drop below the minimum asset value occurs due to market fluctuations, the portfolio will remain in the composite for up to a year, alter which it will be removed if its value remains below 20'/c of the composite minimum asset value at the end of that year. G. VERIFICATION Anchor Capital Advisors LLC AllMA llivision has been verified for the periods presented as follows: 1996-2000: Brown & Brown YC; 2001 ?003: Miller Wachman LLY; 2004-2007: Beacon Verification Services. A copy ol~ the verification report is available upon request. 7. COMPLIANCE STATEMENT Anchor Capital Advisors LLC AllMA llivision has prepared and presented this report in compliance with the Global InvesUnent Performance Standards (GIYSC~). i9 Anchor Capital Advisors LLC Notes to Investment Performance Statistics of Anchor Capital All Cap Composite For the period from January i, i998 through December 3i, 2008 TOTAL ASSETS UNllEK MANAGEMENT FOK PEKlOll: ADMA DIVISION 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Discretionary Managed $ 774,522,402 $ 653,577,901 $ 724,903,871 $ 760,817,583 $ 1,084,803,380 $ 1,358,709,919 $ 1,704,411,133 $ 2,006,351,597 $ 2,095,553,748 $ 1,585,595,791 Accounts COMPOSITE STANllAKll llEVIATION FOK YEKIOD: 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 22.71 8.37 7.68 4.84 5.88 4.25 2.38 3.44 2.82 4.69 10 YEAK COMPOSITE HISTOKICAL VALUES: 12/31/1999 12/31/2000 12/31/2001 12/31/2002 12/31/2003 12/31/2004 12/31/2005 12/31/2006 12/31/2007 12/31/2008 Composite Asset $ 135,334,200 $ 105,469,022 $ 95,127,944 $ 70,450,945 $ 134,619,801 $ 168,802,077 $ 224,682,984 $ 260,132,631 $ 233,329,875 $ 200,980,463 Value Numberof Portfolios 84 71 78 71 86 108 130 155 148 161 %NonFeePaying 0.55% 0.72% 0.73% 0.93% 0.57% 0.50% 0.38% 0.27% 0.32% 0.00% B and led Fee PortfolioAssets' 26.4% 19.8% 17.2% 16.6% 15.7% 12.4% 12.2% 13.6% 15.9% 13.4% "' Bundled brokerage tees. where applicable. include transaction tees. custodial and various consulting Services. 12/31/2008 COMPOSITE CHAKACTEKISTICS: 12/31/2008 %Accounts %ofTotalTaxable Composite Composite Assets Comparable Accounts No. of Clients Average Account Size Median Account Size %Non-Fee Paying %BundledFee Name Portfolio Assets All Cap Managed Account $ 200,980,463 100 % 15.06 % 161 $ 1,248,326 $ 557,324 0.00 % 13.43 Anchor Capital's standard fee schedule for the All-Cap discipline is 1.0% of account assets for accounts from $500,000 to $3,000,000; and 0.5% for assets exceeding $3,000,000. For a complete listing of all composites, available upon request, contact Robert E Croce at (617) 338-3800. 20