Strategic Focus

The Champlain Strategic Focus strategy is a concentrated portfolio of companies that, at the time of initial purchase, were owned in the Champlain Mid Cap strategy; as such, potential holdings are first subject to the Mid Cap investment process. The first step in the Mid Cap process is our sector factors, a set of qualitative judgements that target the business models we find most attractive. We have specific factors for each of the five major sectors: consumer, financials, health care, industrials, and technology. The next step is an analysis of company fundamentals targeting specific company attributes. The third and final step is our valuation analysis to determine Fair Value, namely what the stock is worth today. Once we have identified a security for purchase, we will be very patient in establishing a good entry point for the investment.

universe | S&P MidCap 400 & champlain Mid cap

Strategic Focus Equity Process

1. Sector Factors

Consumer

Brand Loyalty, Low Fashion Risk

Financials

Niche Focus, Avoid Spread Business

Health Care

Minimize Exposure to Government Payors

Industrials

Problem Solvers, Innovators

Technology

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

4. Long-Term Opportunity

  • Business Model
  • Exceptional Management Teams
  • Market Opportunity

Portfolio Construction

Concentrated Portfolio

Number of Names 15–30
Maximum Position Size 15%
Sector Weightings 40%
maximum in any one sector
Market Capitalization
(at initiation of purchase)		 The strategy may invest in securities across market capitalizations

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

1.

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

2.

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

3.

The company being acquired.

Performance | % As of 12.31.23

Strategic Focus Equity Performance

Gross Return Net Return Russell MidCap Growth
Quarter-to-Date 13.59 13.35 14.55
Year-to-Date 27.93 26.85 25.87
1-Year 27.93 26.85 25.87
3-Years – Annualized 3.27 2.40 1.31
5-Years – Annualized 13.28 12.32 13.81
Inception-to-Date
Annualized (01.01.19)		 13.28 12.32 13.81
Inception-to-Date
Cumulative (01.01.19)		 86.61 78.85 90.98

Source: Champlain Investment Partners. Disclosure: Past performance is not indicative of future results. Gross returns are presented before management and custodial fees but after all trading expenses. Net returns are calculated by deducting a model management fee of 0.85% per annum, which is the highest tier of the standard fee schedule for the Strategic Focus Composite. The full standard fee schedule for the composite is 0.85% on the first $50 million, 0.75% on the next $50 million, and 0.65% over $100 million. Actual investment advisory fees incurred by clients may vary, including for those clients who may opt to negotiate a performance fee, which may lead to higher or lower performance than stated above. This information is presented as supplemental to the “Strategic Focus Disclosure” linked below.

Strategic Focus Disclosure