Objective: The Penn Capital Managed Alpha SMID Cap Equity Fund seeks to provide capital appreciation.
Strategy: The Fund generally intends to invest in 50 to 90 securities identified by Penn Capital’s fundamental, bottom-up value driven research. The portfolio construction process involves both quantitative and qualitative fundamental analysis.
Security Type Examples: Common stock, preferred stock, convertible securities, and other investment companies including exchange traded funds (ETFs), American Depository Receipts (ADRs), and real estate investment trusts (REITs).
Sector and Industry Examples: Consumer Discretionary, Consumer Staples, Energy, Financials, Healthcare, Industrials, Information Technology, and Materials.
Our investment team looks for companies with 30% to 50% price growth potential over an 18-month period. We screen for companies creating equity value through both traditional and non-traditional sources.
Step 1 – Fundamental Financial Analysis
Penn Capital’s analysts and portfolio managers screen for companies with improving financial metrics to determine relative value
Step 2 – Qualitative Research
Penn Capital’s analysts and portfolio managers perform qualitative research to confirm relative value
Step 3 – Liquidity Outlook/Covenant Analysis
Penn Capital’s analysts and portfolio managers screen for liquidity issues and perform covenant analysis, bank loan availability and asset value analysis
Step 4 – Recommendation
Primary and secondary analysts and portfolio managers present best new idea(s) to entire team for evaluation and consideration
Step 5 – Decision Making
Two-step approval process requires approval first by the portfolio manager, and second by either the Director of Research or the Chief Investment Officer
Step 6 – Portfolio Construction
Penn Capital’s Equity Strategy Committee meets weekly to discuss macro-view and to determine sector allocations.
All portfolio managers combine expertise (credit and equity) to develop and apply a macro view
Eric Green, CFA, Senior Managing Partner, Director of Research
Mr. Green began his career at Penn Capital in July 1997. Prior to joining Penn Capital, he gained experience with the Federal National Mortgage Association, the Royal Bank of Scotland, and the United States Securities and Exchange Commission where he served as a financial analyst in the Division of Investment Management. As Director of Research, Mr. Green is responsible for guiding the firm’s day to day research process. He also serves as the Portfolio Manager for Penn Capital’s Small Cap and Mid Cap equity strategies and chairs Penn Capital’s equity strategy committee. Mr. Green is also a member of the Board of Directors and the Executive Committee of the ADL, Mid-Atlantic Region. He received a BSBA, Cum Laude, from American University and received an MBA from the Yale School of Management.
Joseph Maguire, CFA, Partner, Senior Portfolio Manager
Mr. Maguire began his career with Penn Capital in January 2005. Prior to joining Penn Capital, he served as a senior audit associate for PricewaterhouseCoopers LLP, and conducted private equity research for AMS Inc. During graduate school, Mr. Maguire interned with Penn Capital’s investment team. He currently serves as a Co-Portfolio Manager for Penn Capital’s Convertible strategy and is the Portfolio Manager for Penn Capital’s SMID equity strategy. Mr. Maguire received a BBA in Accounting from The College of William & Mary and a MBA from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill.
Richard A. Hocker, Founder, Chief Investment Officer
Mr. Hocker founded Penn Capital in 1987 and serves as Chief Investment Officer & Chief Executive Officer, guiding overall portfolio strategy. His investing and institutional non-investment grade corporate lending experience spans over forty years. While serving as a Partner for Delaware Investment Advisors (DIA) from 1977 to 1987, he was responsible for building the investment side of DIA’s fixed income operation. During this period, Mr. Hocker developed and managed one of the nation’s first high yield mutual funds, the Delchester High Yield Bond Fund. He also served as the first high yield bond manager for a number of institutional clients including General Motors, State of Vermont Teachers Retirement Association, and Colorado Fire and Police. Prior to DIA, Mr. Hocker trained as a corporate lender and supported key senior lenders at Provident National Bank, which is now PNC, a top 20 US Banking institution. He later rose to serve as head of the investment division. Mr. Hocker also founded and served as CEO of Covenant Bank, a NJ based regional bank which grew to 16 branches and $500mm in deposits before being acquired by Wachovia Corporation in 1997.
He and his wife, Marcia Hocker, are the founders of the Ethel Mae Hocker Foundation. The Ethel Mae Hocker Foundation provides educational opportunities to less fortunate, deserving Greater Philadelphia-area elementary and high school students. Mr. Hocker received both his BS in accounting and MBA in finance from the Kogod School of Business at American University.