Mid Cap

In the mid cap strategy, the first step in our process is our sector factors, a set of qualitative judgments that set us apart by focusing our attention on more productive industries while biasing us against the more accident-prone or difficult-to-manage companies. There are specific factors for each of the five major sectors: in consumer we avoid fashion risk and look for brand loyalty, with a preference for staples; in financials we avoid spread businesses and focus on niche opportunities; in health care we seek to minimize our exposure to government reimbursement risk and invest in technologies that improve outcomes; in industrials we look for innovators and/or problem solvers and avoid capital-intensive business; and in technology we avoid rapid product obsolescence, which leads us to the software industry and away from hardware. Companies that clear the sector factors then go through a fundamental analysis of company attributes. If a security passes this evaluation, the final phase of the process is the valuation analysis. Only once a security has gone through these phases will the idea be formally presented for discussion around potential inclusion in the portfolio. If the team decides the security is going to be added to the portfolio, they will also discuss an entry strategy and the position size.

universe | S&P MidCap 400, russell midcap & champlain small cap

Mid Cap Equity Process

1. Sector Factors


Brand Loyalty, Low Fashion Risk


Niche Focus, Avoid Spread Business

Health Care

Minimize Exposure to Government Payors


Problem Solvers, Innovators


Low Obsolescence Risk

2. Company Attributes

  • High Returns
  • Low Debt
  • Quality Earnings
  • Sincere and Capable Management
  • Superior Relative Growth
  • Stable Business Models

3. Valuation Analysis

  • Discounted Cash Flow
  • Historical M&A Activity and Comps
  • Strategic Value

Portfolio Construction

Number of Names 50–75
Maximum Position Size 5%
Sector Weightings 25%
maximum in any one sector
Market Capitalization
(at initiation of purchase)
Constituent of either Russell MidCap or S&P 400 Index
or within range of Russell index as of its most recent reconstitution

Ultimately, we see three opportunities to
realize capital appreciation over time.


The stock price rising to a premium to our estimate of Fair Value.


The business growing to scale and increasing our estimate of Fair Value at a faster rate than market appreciation.


The company being acquired.

Performance | % As of 09.30.22

Mid Cap Equity Performance

Net Return Gross Return Russell MidCap S&P MidCap 400
Quarter to Date -4.27 -4.07 -3.44 -2.46
Year to Date -31.28 -30.84 -24.27 -21.52
1 Year -26.94 -26.32 -19.39 -15.25
3 Years – Annualized 5.77 6.67 5.18 6.01
5 Years – Annualized 9.17 10.10 6.48 5.81
7 Years – Annualized 11.87 12.82 8.78 8.74
10 Years – Annualized 12.25 13.21 10.29 10.03
Inception to Date
Annualized (03.26.04)
10.73 11.68 9.01 8.99
Inception to Date
Cumulative (03.26.04)
561.21 673.87 394.56 392.49