The Pacific Ridge Culture
Recently, we were discussing about how our company has grown (now $200+ million in assets under management) since its inception four years ago and the culture that we have developed here at Pacific Ridge Capital Partners. Although most of us have worked together for many years, Pacific Ridge, like every unique entity, has its own culture. We identified three important principles that define ours. To help you get to know us better, we want to share those principles with you in this commentary.
Culture of Patience. Benjamin Graham once opined that “patience” was an investor’s most powerful ally. Investment decisions often take longer to play out than you might initially expect. Also, in the short run, the market may try to convince you that you are wrong. However, our investment decisions are made conservatively, with an eye towards long-term value, the fundamentals of appreciation, and an emphasis on paying the right price. It is a boring strategy that requires intestinal fortitude, and it has worked for us and our clients.
Culture of Collegial Discourse. Some financial institutions are structured around a single dominant personality – the “star system.” We operate with a very different philosophy. Given how we’ve worked together for a long time, we all have a shared definition of value and what makes a good stock investment. At the same time, we do not suffer from groupthink—that is, where we all conform to the same set of actions and decisions. Each person has their own unique take on value within the larger framework, and we do not hesitate to respectfully challenge each other on our decisions. Our team is truly collaborative in every sense of the word, which directly contributes to the results we’ve been able to deliver to our clients.
Culture of Compliance. Sharing high ethical standards really fosters our culture of compliance. When the topic comes up in our discussions, there are no groans or rolled eyes. That’s because we don’t resist compliance. Rather, we integrate it into our daily workflow. Not only do we have a chief compliance officer, two of our team members held the same position with predecessor firms. That brings an ease and comfort with compliance, which our clients concerned about today’s intensive regulatory environment find very reassuring. Given our experience and knowledge that compliance benefits everyone, it’s a part of our nature and our culture.
While there are other aspects that make up a successful company culture, we know that these three— patience, collegial discourse, and compliance—help guide us in our effort to provide superior results for our clients.
If you’d like to see our culture in action (or at least see where it continues to evolve!), we invite you to our open house on September 24, 2014 at 4:00 pm.
Pacific Ridge Capital Partners
About Pacific Ridge Capital Partners
Pacific Ridge Capital Partners is an employee-owned firm. We generate our own investment ideas using fundamental analysis and bottom-up stock picking. The investment team applies a consistent, patient and disciplined process that results in low turnover and stability. Our proven philosophy has performed well over many investment cycles and it is the consistent application of this strategy that makes Pacific Ridge unique.
The principals of Pacific Ridge Capital Partners are invested along with our clients in each of our strategies.
PRCP Small Cap Value – Our Small Cap Value strategy generally purchases stocks in the bottom three-quarters of the Russell 2000® Index. This smaller capitalization segment has a large number of underfollowed companies, providing us the greatest opportunity to exploit market inefficiencies. The typical range of holdings is between 100 and 150.
PRCP Micro Cap Value – Our Micro Cap Value strategy generally purchases stocks in the Russell Microcap® Index. This segment is widely underfollowed, providing us the greatest opportunity to exploit market inefficiencies. The typical range of holdings is between 50 and 80.
We believe these market cap segments offer great potential returns and additional diversification for our clients. For further information about Pacific Ridge Capital Partners and our investment strat- egies, we invite you to contact Tammy Wood via email at Tammy.Wood@PacificRidgeCapital or by phone at (503) 878-8502.
Pacific Ridge Capital Partners, LLC (“Pacific Ridge”, “PRCP”, or “the Firm”) is an employee-owned investment advisor registered with the Securities and Exchange Commission under the Investment Advisor Act of 1940. The Firm was established in June 2010, and has one office located in Lake Oswego, Oregon. Pacific Ridge claims compliance with the Global Investment Performance Standards (GIPS®).
Sources: Pacific Ridge; FactSet Research Systems (“FactSet”); and Russell Investment Group (“Russell”) who is the source and owner of the Russell Index data.
The current annual investment advisory fees for the portfolios managed in the Firm’s Small and Micro Cap Value strategies are 1.00% and 1.50% of assets, respectively. Returns for the composites are presented gross and net of management fees and other expenses and includes realized and unrealized gains and losses, cash and cash equivalents and related interest income, and accrued based dividends. The Firm calculates time weighted rates of return by geometrically linking portfolio simple rates of return at least monthly, with adjustments made for significant external cash flows. The composite returns are calculated by asset weighting the individual portfolio returns using beginning of the period values. All returns are calculated after the deduction of the actual trading expenses incurred during the period.
The information provided should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any securities discussed herein will remain in our strategy at the time you receive this report or that securities sold have not been repurchased. It should not be assumed that any of the holdings discussed herein were or will be profitable or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein. Past performance is no guarantee of future results.
Although the statements of fact and data in this report have been obtained from, and are based upon, sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed. All opinions included in this report constitute the Firm’s judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.
The Russell 2000® Value Index measures the performance of the Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. For comparison purposes, the index is fully invested, which includes the reinvestment of income. The return for the index does not include any transaction costs, management fees or other costs.
The Russell Microcap® Value Index measures the performance of the microcap segment of the U.S. equity market. For comparison purposes, the index is fully invested, which includes the reinvestment of income. The return for the index does not include any transaction costs, management fees or other costs.
Returns and asset values are stated in US dollars.