The US small cap market, often overlooked due to its size and lack of research coverage, may present significant opportunities for outsized growth. We believe these inefficiencies position for active managers to generate substantial returns. Our innovative solution is designed to navigate this complex landscape, uncover hidden gems, and deliver consistent alpha while managing risk.
We believe that the choice between fundamental and quantitative investing is a false dichotomy. Our strategy bridges this gap, offering a style-agnostic solution that leverages fundamental analysis to identify market inefficiencies. This approach leads to unbiased, rational, and consistent decision-making based on sound economic principles. By combining actively managed quantitative skills and automated fundamental analysts, we identify mispriced companies that offer the potential for outsized growth and excess returns.
At Lazard Asset Management, our team has developed a unique framework comprising over two dozen diversified and uncorrelated concepts, known as Automated Fundamental Analysts. These analysts continuously re-evaluate the entire market universe to identify mispriced companies, enabling us to manage a diversified portfolio of approximately 400 names.
The Whole is Greater Than the Sum of its Parts
Our proprietary investment framework allocates a percentage of capital to each of the independent Automated Fundamental Analysts according to the number of ideas each Analyst generates. In diversifying across these uncorrelated sleeves, the portfolio has multiple fundamental sources of potential alpha and can achieve a higher cumulative outcome than if allocated to individually.
With market conditions presenting attractive valuations for small cap stocks, we believe our systematic approach is well-positioned to deliver consistent alpha while deploying assets in an inherently volatile asset class.
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