Cover | Published in August 2013

2013 Best Managers You’ve Never Heard Of

By John Keefe | August 2013
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Lastly, the portfolio is subjected to a diversification check, to ensure that the bottom-up stock selection has left no important sectors of the economy unrepresented. Huber cites the example of precious metals: “At the start of 2011, we realized we had no exposure to gold in the portfolio, after it had gone from $500 to $1,000 an ounce. We thought there was very little alpha in large gold mines. Ultimately, we invested in pawn shops, which are retailers but have 70% of their book value in the form of precious metals. They kept up with the mining stocks on the upside but offered us a lot more downside protection than the gold miners.”

The firm is owned entirely by employees, with Huber retaining a majority stake. “That enables me to make those decisions that are best for the portfolios and ultimately the clients,” he notes. For instance, the Small Cap Value strategy was closed to new clients at assets of $800 million in April—a time when recent results left prospective clients clamoring to invest. “There was only one reason behind closing the strategy at that point: Generate the best possible product for our clients.”

The firm is on its way to Huber’s goal of long-term No. 1 standing with its Small Cap Value strategy, which was the top performer in its group in the eVestment universe for the five years ended in June. While that strategy is no longer available to new clients, Huber’s Fundamental Large Cap Value product is highly ranked, as well, earning a spot in the top quartile for the three years ended in June, beating the Russell 1000 Value benchmark with annualized excess return of 1.90%.