Robert Marren Invests in Small Cap Growth Companies That Are Making Big Changes

April 29, 2019

Robert Marren is a Portfolio Manager and a Managing Director with Allianz Global Investors, which he joined in 2007. He has portfolio management and research responsibilities for the U.S. Small Cap Growth team. He was previously the Director of Research and a portfolio manager of microcap growth equities for Duncan-Hurst Capital Management.

Before that, Mr. Marren was an assistant manager of corporate finance for Hughes Aircraft Company, focusing on debt financing and mergers and acquisitions.  In this exclusive 3,591 word interview with the Wall Street Transcript, Mr. Marren explores the upside for small cap growth investors.

“We are growth investors, and we believe that because of the inefficiencies and information flow that exist in small cap and even more so in microcap, we can get an information edge through fundamental research.

And the primary way we do that is we consider ourselves experts in change. We’re looking at companies that are undergoing some sort of either internal or external change, could be a new management team, a new product launch.”

An example investment, detailed in the interview:

“Another company that we’re invested in is a company called Rosetta Stone (NYSE:RST). And Rosetta Stone, you may remember them as their legacy business, selling the yellow-box software that helps you learn a new language, but they’ve really reinvented themselves, along with this change theme, where they’re moving to a subscription-based model from selling just a box piece of software.

They’re expanding into the K-12 literacy market. They’re still doing the foreign language learning business, but they’ve switched that to a subscription model.

So we have recurring revenues, and they’re really growing fast in the K-12 model, working on or providing programs to schools to help children with English literacy. It’s a new business for them; it’s growing quite rapidly.

We think the market is still perceiving them a little bit based on their old business, but as they convert to a full or nearly full SaaS business — software-as-a-service business — we think we will see multiple expansion at Rosetta Stone.”

Get more of these growth investment gems by reading the entire 3,591 word interview, exclusively in the Wall Street Transcript.