The Driehaus International Growth Equities team focuses on investing in non-US companies through the Driehaus International Small Cap Growth strategy. The strategy provides investors with exposure to companies experiencing growth inflections in addition to positive earnings revisions and medium-term (price) momentum, two factors that are positively correlated to alpha generation. The team is led by portfolio managers Dan Burr and David Mouser.
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The strategy seeks to outperform the MSCI AC World ex USA Small Cap Growth Index over full market cycles.
* The Driehaus International Small Cap Growth team manages multiple international small cap strategies/ styles.
The team employs a growth-oriented investment philosophy focusing on identifying company-specific growth inflection points and exploiting associated marketplace inefficiencies. Our philosophy hinges on a belief that market expectations tend to be ‘anchored’ to historical information and that points of inflection therefore introduce dislocations between market expectations and fundamentals which generate significant alpha capture opportunities. The team combines bottom up fundamental and macro analysis with a nimble and active investment approach to identify inefficiencies and generate a portfolio which uniquely seeks to achieve superior aggregate growth rates as well as superior risk characteristics.
The macroeconomic and geopolitical environment is drastically different than the regime that prevailed at the start of the year. Inflation accelerated, growth slowed more than anticipated, conflict emerged in Europe, and China re-opened after a substantial period of lock down. Read about how the Driehaus International Small Cap Strategy outperformed its benchmark latest quarterly letter.
The persistency of elevated inflation has created a dynamic that has not been seen for close to 40 years. The predominant source has been region dependent: Europe has been most impacted by a shock to energy prices from the war in Ukraine. Whereas in the United States, the increased rate of inflation started primarily as a shortages/supply pressure story and has now transitioned to a tight labor market story. In the US, the labor market is the tightest it has been since World War II. The retirement of Baby Boomers, immigration restrictions and COVID have all limited supply, with demographics being the most relevant of the three.