Investment approach fuses classic fundamental research with modern data science and machine learning to improve long-term investment results
Saguaro Capital Management, a value investment firm with extensive experience and expertise combining classic fundamental analysis with modern data science tools and proprietary machine learning models to produce attractive long-term returns, announced its official launch.
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The Firm is led by James Falbe, CFA, Managing Principal and Portfolio Manager. Mr. Falbe was previously a Principal and Portfolio Manager at Vulcan Value Partners. As a member of the senior investment team for eight years, he was responsible for portfolio management, coverage of both portfolio and watch list names, and identifying new investment opportunities. Mr. Falbe also initiated and led the development of Vulcan’s data science and machine learning capabilities. Prior to Vulcan, he spent time in the University of Notre Dame’s investment office and at Schacht Value Partners. Mr. Falbe earned a Bachelor of Arts from Baylor University, a Master of Divinity in Theology from Baylor as well as an MBA from the University of Notre Dame’s Mendoza College of Business.
The Firm will focus on implementing a highly disciplined investment approach that concentrates on finding and following the world’s best companies, buying them only at meaningful discounts to intrinsic value, and maintaining positions for as long as possible, allowing them to compound and generate exceptional returns for investors. Mr. Falbe and his team will utilize put and call options to fortify and monetize their portfolio’s buy/sell discipline and will leverage a range of data science, machine learning, and natural language processing capabilities to enhance their human fundamental research.
James Falbe, Managing Partner and Portfolio Manager, Saguaro Capital Management, said, “We believe our human research team to be world class. However, we also recognize that what produced top tier results for the last twenty years is not sufficient for the decades ahead. Humans are driven, creative, and imaginative, but machines are tireless, they process an order of magnitude more data, and their relentless logic is devoid of emotion. If future performance is your goal, we believe a fusion of man and machine is going to get you there.”
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Mr. Falbe is joined at Saguaro by a group of distinguished Principals, each of whom possess deep experience in their respective areas of expertise and whose differentiated skills sets will help drive business impact and meaningful value for the firm’s investors. The executives include:
- John Collier, CFA, Principal, Director of Investor Relations: Mr. Collier was a Principal and Relationship Manager at Vulcan Value Partners for approximately eight years. He was responsible for building and maintaining deep client relationships and communicating Vulcan’s investment approach. Prior to Vulcan, Mr. Collier served as Vice President and Portfolio Manager for Regions Wealth Management and Regions Institutional Services, where he managed investment portfolios of both high net worth and institutional clients. Mr. Collier received a Bachelor of Science in Finance and Economics from The University of Alabama.
- Bruce Donnellan, CFA, Principal, Research and Strategic Advisor: Mr. Donnellan has over 40-years of experience in investment analysis and management in a variety of industries including real estate, unregulated power and private and public equity. He was an original partner at Vulcan Value Partners which grew from $20 million in AUM to $13 billion at the time of his retirement. At Saguaro he is a part-time member of the research team, and part-time strategic advisor, focusing much of his efforts on setting up the finance function of the Firm. Mr. Donnellan received a Bachelor of Electrical Engineering from Auburn University and an MBA from Wharton at The University of Pennsylvania.
- Bryan Tsiao, Principal, Research Analyst: Mr. Tsiao was previously an Associate Analyst at Vulcan Value Partners. He spent three years in various equity-related analytical roles to support coverage of names in both the portfolio and on the watchlist and was also the primary instructor for Vulcan’s Intern and Associate Analyst training programs. Mr. Tsiao earned a Bachelor of Science in Commerce & Business Administration with a major in Finance and a concentration in Insurance from The University of Alabama. He also received an Advanced Certificate of Ministry and Leadership from Highlands College. Mr. Tsiao has passed Level II of the CFA program.
- Tyler Thomas, Principal, Data Science: Mr. Thomas was previously a Data Scientist at Vulcan Value Partners. He was primarily responsible for predictive modeling of text and time-series data, but also spearheaded Vulcan’s Natural Language Processing and Computer Vision efforts. Mr. Thomas earned a Master of Science in Applied Statistics from The University of Alabama, and a BA in Mathematics and Economics from the University of Colorado Boulder. He is a Ph.D. Candidate in Applied Statistics at The University of Alabama, where he is expected to graduate in 2022. His dissertation is on Statistical Applications to Finance.
- Emily Cranton, Principal, Director of Operations: Prior to joining Saguaro, Ms. Cranton was a Project Manager at the Indiana Finance Authority in the Water Resources and Infrastructure division. Prior to the Indiana Finance Authority, she served as a Program Coordinator for the STEM Scholars program at Samford University, which aims to increase diversity in fields where minorities are underrepresented. Ms. Cranton holds both a Master’s in Public Affairs with a focus on Nonprofit Management, and a Master’s in Environmental Science with a focus on Water Resources from Indiana University. She also earned a Bachelor of Science in Biological Sciences, focused on Health and Environmental Studies, from Samford University.
Saguaro began accepting external capital allocations during the third quarter of this year. The Firm currently offers investors three fund vehicles to invest in that are comprised of Large Cap, SMID Cap and All Cap investment strategies. The Large and SMID funds operate under the 3(c)(7) exemption of the Investment Company Act of 1940 and the All Cap fund operates under the 3(c)(1) exemption of the Investment Company Act of 1940. Full fund documents are available upon request. Saguaro seeks to partner with institutions that share their long time-horizon and an appreciation for technology enhanced fundamental value investing. Anchor share classes are available only for the first 5% of their strategies, which are all capacity constrained.
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