Investment Strategies

U.S. Growth Equity

William Blair & Company offers five U.S. growth equity strategies (All Cap, Large Cap, Mid Cap, Small-Mid Cap, and Small Cap). Each strategy employs a disciplined, research-intensive approach to analyzing companies and building portfolios within their respective market cap segment. We seek to invest in quality growth companies that we believe will grow faster than the market expects and/or sustain growth for a longer period than the market expects. We believe quality growth companies are able to achieve these growth hurdles by possessing superior management teams, sustainable business models, and solid financials. We believe our intense focus on longer-term earnings growth differentiates us from a world that increasingly focuses on short-term dynamics. Our framework for analyzing both the level and durability of growth is well-defined and consistently applied over time. Our portfolio managers and research analysts work together throughout the investment process, from idea generation to sell decisions, to ensure management teams and business models are continuously scrutinized, and that valuations on portfolio holdings remain attractive. It is our opinion that a great company does not necessarily offer a good investment return if its stock price already discounts its future growth properly. In the end, both stock-specific and portfolio-level investment decisions are made by the portfolio managers and are consensus-based. Our long-term objective is to create well-diversified portfolios of quality growth companies that outperform their respective benchmark and peers over a full market cycle.

Non-U.S. Equity

William Blair & Company offers eight non-U.S. growth equity strategies (International [All Cap], International Core, Emerging Markets, Emerging Leaders, ADR, International Concentrated, International Small Cap, and EAFE) that cast a wide net across regions and sectors outside the United States. The portfolio managers seek the best non-U.S. stocks of well-managed, quality growth companies that we expect to maintain exceptional growth and profitability relative to other companies in the same industries worldwide. In our view, quality growth companies will generate above-average results for our clients over time with generally less risk than the market. This opportunity exists because the market underestimates the durability and rate of growth in quality companies. We believe that this philosophy can be combined with strategic flexibility in managing geographic exposure, capitalization, sector emphasis, and relative growth and valuation at the portfolio level to provide an appropriate degree of adaptability to cyclical conditions. The investment process starts from an unbiased and cosmopolitan perspective, with a research process that emphasizes judgment about company management and fundamental execution. Our evaluation criteria are clearly defined and our decision process is consensus-driven and collegial. Depending on the strategy, holdings may come in all sizes, sectors, and regions. Our research framework assists us in identifying a company’s long-term potential and risk structure in a consistent, repeatable way. We seek portfolio holdings that exhibit consistent profitability and growth, better-than-market balance-sheet structure, and reasonable valuation rates. Our long-term objective is to create well-diversified portfolios of quality growth non-U.S. companies that outperform their respective benchmarks and peers over a full market cycle.

Global Equity

The William Blair Global Growth strategy is designed to provide exposure to U.S. and non-U.S. stocks of all capitalizations and sectors. Like our non-U.S. equity strategies, the Global Growth portfolio managers seek stocks of quality growth companies that are well-managed and that we expect to maintain exceptional growth, profitability, and quality relative to other companies in the same industries globally. This strategy also follows the same investment process as our non-U.S. equity strategies. Our long-term goal is to build a well-diversified portfolio of worldwide quality growth companies that outperforms its benchmark and peers over a full market cycle.

U.S. Value Equity

The William Blair Small Cap Value strategy deploys an investment philosophy that is based on the belief that successful companies possess superior capital stewardship as characterized by strong cash flow generation, improving/sustainable return on invested capital, and shareholder-value-focused management teams. Our investment process is structured to deliver what we believe is the appropriate balance of valuation and fundamentals. We deploy a quantitative screening process on the front end followed by extensive fundamental analysis on an ongoing basis. We ask ourselves the following: Is this a quality company or just a statistically cheap stock? Is this a potential corporate transformation? Does this company possess distinctive attributes that set it apart from peers? We then perform more in-depth financial analysis and valuation work, including our proprietary cash flow return on invested capital model, along with additional competitive analysis and management vetting. Although each team member is responsible for generating new ideas in his specific areas of expertise, the investment process is extremely collaborative and benefits from the team’s broad industry experience. All portfolio construction decisions are consensus based and each team member is fully accountable for each investment. Sector weights are closely monitored relative to the benchmark to isolate our stock selection, where we firmly believe we add the most alpha. Our long-term performance objective is to outperform our benchmark and peers over a full market cycle. We believe a portfolio that possesses the appropriate balance of valuation and fundamentals will allow our strategy to achieve this objective.

Fixed Income

The William Blair Fixed Income strategy invests primarily in investment-grade securities and seeks to maximize total return through a combination of income and capital appreciation. The strategy uses experienced sector specialists who seek to identify and capitalize on inefficiencies in bond markets. Through a disciplined, bottom-up research methodology, we focus on creating alpha for our clients, primarily through security selection and tactical sector allocation. Although the fixed-income market is efficient in the long run, we believe the markets for corporate debt securities, mortgage-backed securities, and asset-backed securities consistently provide alpha opportunities that can be identified by managers who specialize in those sectors. Our fixed-income platform is vertically integrated to include research, portfolio management, and trading. This structure allows liquidity and price-discovery information to be incorporated into all portfolio decisions.