More than 16 Years of Growth Equity Investing, One Differentiated Approach
BOSTON–(BUSINESS WIRE)–Loomis, Sayles & Company:
77.6
136
1
BILLION IN ASSETS UNDER
MANAGEMENT
COMBINED YEARS OF INVESTMENT
EXPERIENCE
INVESTMENT PHILOSOPHY
GES Team
GES Team
Supported by a seven-step research
framework
As of 3/31/22
As of 3/31/22
Loomis, Sayles & Company, an affiliate of Natixis Investment Managers, celebrates the 10-year anniversary of the Loomis Sayles Long/Short Growth Equity strategy managed by the firm’s Growth Equity Strategies (GES) team.
The Long/Short Growth Equity strategy is among a suite of equity products managed by Aziz V. Hamzaogullari, the chief investment officer and founder of the Loomis Sayles GES team. The team’s $77.6 billion in assets under management also comprises Large Cap Growth, All Cap Growth, Global Growth, and International Growth strategies. The GES team’s single alpha engine, employed across all strategies drives both long and short idea generation by seeking to identify both structurally attractive and structurally deficient businesses. The GES team’s long-term, private equity approach is underpinned by a single differentiated investment philosophy and supported by a proprietary seven-step research framework. For long positions, the team seeks to invest in those few high-quality businesses with sustainable competitive advantages and profitable growth only when they trade at a discount to the GES estimate of intrinsic value. Short selling opportunities can arise when the team’s research identifies companies that trade at a significant premium to the estimate of intrinsic value due to structural deficiencies or unsustainably high investor expectations.
Learn more about Loomis Sayles’ Growth Equity Strategies team.
“The GES team has achieved a strong performance track record across its suite of products where the longest track record is more than 16 years. We are proud of the GES team’s passion for delivering alpha to our investors through its disciplined, long-term investment decision-making that emphasizes deep fundamental research,” said Kevin Charleston, chief executive officer and president of Loomis Sayles. “We launched the Long/Short Growth Equity strategy to bring to our investors the value of the team’s alpha insights in long and short opportunities.”
Aziz Hamzaogullari, CIO and founder of GES said, “More than a decade ago, we realized that our singular proprietary process organically generated alpha insights in short opportunities that we were unable deliver to our investors in our long-only strategies. Since inception, our Long/Short Growth Equity strategy has delivered alpha in both longs and shorts while simultaneously imparting hedging benefits in both mild and severe market declines.”
Long/Short Growth Equity Strategy
$208mm AUM
Since initiation of short exposure in 2012, the Long/Short Growth Equity Composite has achieved an annualized gross return of 9.35% (7.85% net return) with standard deviation of 9.14% (gross). The strategy has generated 4.61% of gross alpha (3.40% net alpha), of which 48% has stemmed from the strategy’s short holdings and 52% has stemmed from long holdings.
Inception 2/1/2012 Initiation of short exposure 5/23/2012
The Long/Short Growth Equity strategy seeks to produce favorable risk-adjusted returns over a full market cycle through a reasonably concentrated portfolio of long and short investments in growth equities.
Please see Trailing Returns, gross and net, for the Loomis Sayles Long/Short Growth Equity Composite below.
See also below where we illustrate how the strategy has performed and helped protect capital during quarters in which the S&P 500 has suffered serious declines.
Past performance is no guarantee of future results.
LOOMIS SAYLES LONG/SHORT EQUITY COMPOSITE (%)
Trailing Returns (gross and net of fees) as of 3/31/2022
Gross of Fees
Net Foundational Fees
0% Management/10%
Incentive Allocation
S&P 500 Hedged 50%
Q1 2022
3.12
2.92
-2.26
1 Year
1.64
0.85
7.79
5 Year
5.49
4.31
8.05
10 Year
8.18
6.75
7.32
Since Initiation of Short Exposure (5/23/2012)
9.35
7.85
7.77
Since Strategy Inception (2/1/2012)
8.73
7.24
7.59
Data source: Loomis Sayles.
Gross returns are gross of fees and net of trading costs. Net returns are gross returns less effective management fees.
Initiation of short exposure was 5/23/2012, although no investor was offered the opportunity to invest as of such date. Additional short positions were initiated 4/4/2014 – 4/7/2014. Net return information for that period is based on a high water mark of an account that invested at inception (2/1/2012); use of a 5/23/2012 or 6/1/2012 high water mark would result in lower performance. Returns for multi-year periods are annualized. Foundational net returns include the application of an effective management fee of 0% per year and an Incentive fee of 10% on positive performance for the calendar year. Net returns depict the return which would have been received by an investor who invested at inception bearing foundational fees and who participated in all investments; this may not reflect the return achieved by any particular investor.
The Long/Short Growth Equity Strategy is considered an absolute return strategy. Because the strategy’s structure is typically approximately 100% long positions and 50% short or hedge positions combined, we are including an S&P 500 Index Hedged 50% as a reference benchmark for illustrative purposes only.
Performance data shown represents past performance and is no guarantee of, and not necessarily indicative of, future results.
SHORTS HAVE A DUAL ROLE IN THE STRATEGY
Historically, shorts have been sources of alpha while also hedging the strategy
Long / Short Growth Equity Return %
(Gross)
Long / Short Growth Equity Return %
(Net Foundational Fees)
Short Position Return % (Gross)
S&P 500 Return %
Q4 2018
-0.99
-1.19
-20.86
-13.52
Q1 2020
3.2
2.75
-29.18
-19.6
Long / Short Growth Equity Strategy versus S&P 500
Excess Return (gross)
+12.53%
+22.80%
Down Market Capture
7%
0%
Data source: Loomis Sayles.
Gross returns are gross of fees and net of trading costs. Foundational net returns include the application of an effective management fee of 0% per year and an Incentive fee of 10% on positive performance for the calendar year.
Selected market drawdown periods are the largest quarterly drawdown of the S&P 500 since inception of the strategy (2/1/2012). This analysis is as of 3/31/22 and is updated quarterly. Given that we are currently in a drawdown period, this analysis is subject to change as we move forward.
Important Disclosure
There is no guarantee that the investment objective will be realized or that the strategy will generate positive or excess return.
Any investment that has the possibility for profits also has the possibility of losses, including loss of principal.
Indexes are unmanaged and do not incur fees. It is not possible to invest directly in an index.
For most recent month-end performance, visit www.loomissayles.com.
Loomis, Sayles & Company, L.P. (“Loomis Sayles”) is an independent advisory firm registered under the Investment Advisors Act of 1940. For additional information on this and other Loomis Sayles strategies, please visit our website at www.loomissayles.com.
About Risk
Equity securities are volatile and can decline significantly in response to broad market and economic conditions. Foreign and emerging market securities may be subject to greater political, economic, environmental, credit, currency and information risks. Foreign securities may be subject to higher volatility than US securities due to varying degrees of regulation and limited liquidity. These risks are magnified in emerging markets. Investments in small and mid-size companies can be more volatile than those of larger companies. Growth stocks may be more sensitive to market conditions than other equities as their prices strongly reflect future expectations. Currency exchange rates between the US dollar and foreign currencies may cause the value of the fund’s investments to decline.
ABOUT LOOMIS SAYLES
Since 1926, Loomis, Sayles & Company has helped fulfill the investment needs of institutional and mutual fund clients worldwide. The firm’s performance-driven investors integrate deep proprietary research and risk analysis to make informed, judicious decisions. Teams of portfolio managers, strategists, research analysts and traders collaborate to assess market sectors and identify investment opportunities wherever they may lie, within traditional asset classes or among a range of alternative investments. Loomis Sayles has the resources, foresight and the flexibility to look far and wide for value in broad and narrow markets in its commitment to deliver attractive, risk-adjusted returns for clients. This rich tradition has earned Loomis Sayles the trust and respect of clients worldwide, for whom it manages $335.9 billion* in assets (as of 31 March 2022).
*Includes the assets of both Loomis, Sayles & Co., LP, and Loomis Sayles Trust Company, LLC. ($38.4 billion for the Loomis Sayles Trust Company). Loomis Sayles Trust Company is a wholly owned subsidiary of Loomis, Sayles & Company, L.P.
MALR29180
Contacts
Kate Sheehan
(617) 960-4447, ksheehan@loomissayles.com
