Mr. Huber: We founded Geneva, in January of 2003, as an independent investment management firm headquartered in Chicago. Today we have 54 employees and our 12 person investment team manages $3.4 billion for institutions and high net worth investors. Many of our principals and key members of our investment team have been working together since the early 1990's. The principals of Geneva invest alongside our clients. Geneva's institutional arm manages assets for foundations, endowments, corporate pensions and other consultant driven assets. We also have 14 relationship managers who use Geneva's centrally managed investment strategies to serve high net worth individuals. Geneva's equity team manages six GIPS-compliant growth strategies and three income-oriented strategies. Our fixed income team manages a taxable and a non-taxable bond strategy.
Mr. Bridges: Our All Cap Growth strategy is in its 17th year. The performance has averaged 12.9% per year net of fees versus 7.6% for the S&P 500 in that period.
We believe the significant out-performance over 16 years (which include two of the worst bear markets in U.S. history), can be attributed to a disciplined investment philosophy and process. Our commitment is to adhere to our process, year-in, year-out, through all types of environments. We believe it is the best way to build wealth in the stock market over time.
We focus on identifying the highest quality, sustainable growth companies. Nearly every quarter since 1994, we have identified a portfolio of companies that has averaged more than a 25% increase in year-over-year earnings. There is a high correlation between earnings growth and the equity performance over time.
To reduce the risk of growth investing, we have focused on quality companies with an emphasis on dominant competitive positions. We invest in companies that are extremely hard to replicate and compete against. It is critical that businesses have sustainable advantages such as owning patents, deriving value from network effects, being low cost providers or producing differentiated products that enable them to become dominant competitors.
We seek visible growth businesses operating in large markets with recurring revenue, pricing flexibility, and simple strategies to execute. That approach has kept us out of many of the more speculative growth companies. We invest in these businesses at reasonable multiples of cash flow and earnings and look to trim when valuation issues arise. Positions are sold when there are changes in long-term fundamentals or a significant deceleration in the business momentum. Identifying key inflection points in a company's growth outlook is a critical part of growth investing. Our goal is at all times to have a portfolio of the highest quality companies that deliver well above average growth, exceptionally strong profitability and are at reasonable valuations.
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