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Alger’s approach is straightforward: identify companies that can drive Positive Dynamic Change and capitalize on it.
Fundamental research is crucial in that regard. For nearly 60 years, it has been the cornerstone of the firm’s investment process, aiming to incorporate analysts' best ideas into portfolios.
But that’s just half the story. Alger’s success stands with its team—a talented, diverse group of investors. More than 50% of the firm’s portfolio managers are women and/or minorities.
Alger analysts serve as sector specialists who can provide unique, extensive and in-depth industry perspectives. Each member constantly strives to achieve the best possible outcomes for clients and plays a vital role in keeping the Alger legacy alive: investing in growth and change.
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Alger is all about growth.
Its investment philosophy is predicated around finding companies undergoing ‘positive dynamic change’, which includes both early-innings growth from new or expanding businesses and more established companies entering a new stage of their life cycle.
Watch to learn more about Alger’s unwavering commitment to growth investing and how its team identifies growth and change.
Rebuilding the company on an iconic blueprint
The early decades of leadership at Alger embedded a clear growth philosophy and a culture of diversity that powered it to titan status
When boutique growth investor Alger was hiring consultants to create a mission statement, the process fell flat. For CEO and CIO Dan Chung, it felt unnatural to homogenize a firm whose culture was grounded in diversity and an appreciation of individuality.
‘The organism of Alger is incredibly strong but it doesn’t like to be described by a set of written statements,’ he said.
The company’s team has been committed to growth investing. Its drive to outshine competitors often results in intense debates about stocks.
‘To foster that, you want as many individual actors in that debate as possible, including junior people,’ said Chung. ‘I often tell junior people that part of the reason they’re here is training, but it’s also because if you’re going to ask me what I think about TikTok and Snapchat, I’ve never been on either, so I’m a very bad reference.’
Chung sees parallels between Alger and the university environment in which he – a former lawyer with university professor parents – and many of the senior management team, excelled.
In running Alger, Chung is preserving the legacy of Fred Alger – who founded the firm in 1964 – and his brother David, who took the reins in 1995.
‘They loved giving opportunity to non-traditional candidates, people who didn’t have an MBA or a finance background,’ said Chung. ‘They admired drive more than pedigree and were very meritocratic about giving responsibility, as much and as early as possible, to people who showed promise. That was a huge thing for Fred and David.’
One of their protégées was Theresa ‘Ginger’ Risco, who joined Alger as a secretary. Having attended night school and subsequently became the first in her family to attain a university degree, she was admitted to its analyst training program.
When she died in the 9/11 attacks alongside David and the other 34 employees who were in Alger’s 93rd-floor office, she was a senior vice president and senior analyst – and a legend on Wall Street.
In the years that followed, Chung rebuilt Alger, keeping with the staunch growth investment philosophy and research-intensive strategy that Fred possessed when he started the company almost four decades earlier.
‘People shouldn’t forget what their legacies are, what their roots are,’ said Chung. ‘I have a great respect for traditions, especially when they’re good ones.’
But it’s not just good traditions he’s holding dear – giving back to the community also plays a major role for him. Chung started the Alger Candlelight Giving Committee, which supports numerous charities and non-profit organizations through donations and active volunteering.
Onwards and upwards
The past decade has seen Alger grow and cement its position as a titan in growth equity investing. The company has also steadily expanded its existing product suite to include focused growth equity strategies and most recently, semi-transparent active ETFs.
Alger’s position is particularly powerful today as change abounds and innovation remains the driver for companies to outpace the market, even though larger asset managers are not investing in fundamental, active management.
‘Fred Alger, David Alger and Alger today, we’re unique in that our philosophy is driven to look at the most challenging, changing and uncertain situations,’ said Chung.
‘All of that change is where Alger tends to thrive because we have the culture, the people, the philosophy and the process. Instead of running away from the uncertainty, we recognize that in the uncertainty, in the change, there are companies and people and innovators who will see the positive.
‘A lot of our competitors are not trying to grow in this area, they’re just holding place,’ he said. ‘That offers a lot of exciting opportunities for us. Growth equity is a key aspect of any long-term investment plan. It’s a large part of our industry and we’re increasingly becoming a home for the best talent.’
CEO and CIO at Alger
‘If you think about university cultures, it’s not about harmonization and committee-like homogenization of ideas and personalities, or even work processes. It’s about unleashing the creativity and the talent of the people in the environment.’
When recruiting – as Alger now is – Chung favors candidates who have achieved great success, be it academically, in music or athletics. Ultimately, the thing Chung pays particular attention to is those who have arrived at asset management via an unconventional route.
‘I almost always give a very hard look at someone who’s managed to be first in their family to go to college,’ he said. ‘And I will interview anybody who has a brilliant career ahead of them, but seems to want to abandon it, because there’s usually an interesting commitment to learning and wanting to change that I’ve found to be very successful.’
I will interview anybody who has a brilliant career ahead of them, but seems to want to abandon it, because there’s usually an interesting commitment to learning and wanting to change that I’ve found to be very successful.
Resilience is the true driver of small cap innovation
Small cap investing with a focused strategy form a powerful combination, according to Amy Zhang.
For Amy Zhang, finding undiscovered small and mid-cap stocks is a passion.
She looks for exceptional small and medium-sized companies which are experiencing positive dynamic change and have the potential to become successful large cap companies.
The executive vice president and portfolio manager at Alger explained: ‘We do our best to identify companies early in their corporate lifecycle. Our bottom-up fundamental research enables us to have a differentiated view. For us, it’s really about growth not priced in and we try to discover a small company before anybody else discovers it.’
Alger’s forte is stock selection – and in the small and mid-cap space, it is very doable. ‘When we look at a company, initially we look for the potential to become exceptional large companies. We spend an inordinate amount of time differentiating bumps in the road versus permanent impairment of fundamentals.
‘If we have very high confidence in the future growth prospects, we will be tolerant with the market gyrations because we focus on the value creation engine of the company. And regardless of market volatility, over the long-term, stock prices usually track the value creation,’ noted Zhang.
Executive vice president and portfolio manager
Actions speak louder than words
The core of Alger’s culture are meritocracy and diversity. And for Zhang it is important to have a diverse team with the intensity to focus on research and a passion for delivering superior long-term performance for the firm’s clients.
The company sees itself as a large boutique with a very close-knit diversified culture and a pioneer in growth investing. CEO and CIO Dan Chung is a futurist and has a knack for focusing on the long term. Self-motivation is an integral part of Alger’s culture.
‘I really think Alger is an industry leader and I want to be with a titan in the sense that what I do or what everybody at Alger does can really make a meaningful impact,’ said Zhang.
Looking at the current environment, as economic conditions slow, Zhang believes growth will become scarcer so that innovation will still be the driver for companies to outgrow the market. According to Zhang, Alger is well-positioned for the future and investing in such companies, which can disrupt or transform a market.
Amy Zhang is a woman of action—both in and out of the office. She has been named Active US Equity Manager of the Year by the Women in Asset Management Awards, Best Alpha Manager, Small Cap by FE fundinfo, and rated in the Top 20 Female Portfolio Managers in the US by Citywire – and those are just some of the accolades she received over the years.
Zhang is well aware that women and minority groups are underrepresented in asset management, which is why she has championed a personal effort to close that gap. In 2015, Zhang founded the AYZ STEM scholarship at her alma mater, Manhattanville College, to help female recipients who are interested in STEM-related fields with funding for equal educational opportunities. Her goal: allowing them to work toward future careers in industries that have been traditionally dominated by men.
Additionally, Zhang is a leader dedicated to opportunities for Asian women in professional fields. She’s been honored several times by
The Mulan Club, she received the 50 Outstanding Asian Americans in Business Award in 2019, and she has served as a judge for the Rising Star Award and a panelist for SupChina Women’s Conference over the years.
Looking for that special something
A lot of companies in Zhang’s portfolios are science-based and have something truly differentiated. She prefers companies that have a ‘very wide and strong moat, the moat getting wider and stronger, while also having pricing power. A lot of companies in which we invest are in very open-ended markets; they’re the leaders and they generally become stronger.’
‘For us, longevity and strength are the prime factors of growth investing. We typically have a three-to-five-year outlook for our investments.’
When it comes to people, Zhang sees attracting talent like investing in stocks; she looks for drive – something that demonstrates prolonged resilience and a willingness to overcome adversity. ‘Anything worth having is never easy; tenacity is exceptional because when there is a challenge, most people jump ship.’
For Zhang, humility among her team is very important. ‘What I strongly dislike is overconfidence in analysts. Being open-minded is very important in our business because it’s a judgement business.
‘One has to have a flexible mind, willing to constantly learn and extend new things and have humility,’ she adds.
Innovation is an enduring force that holds the key to progress and growth for many companies.
It has been an extremely powerful force and can be the driver for companies to outgrow competitors and the market. And Alger focuses on finding those types of companies that can transform entire industries and our lives.
One of Alger’s greatest cultural strengths is the ability to focus on one goal: delivering results for clients.
The firm’s history of developing talent started with the firm’s founding in 1964 and continues to this day. With an emphasis on meritocracy, analysts at the firm are encouraged to bring their diverse ideas, thoughts and opinions to the table.
Breaking the mold
Growth investing is about understanding change – and harnessing diverse viewpoints gives you the edge, according to Ankur Crawford
While finishing up an engineering PhD at Stanford, Ankur Crawford answered a recruiter’s request to meet Dan Chung, CEO and CIO of Alger.
By her own admission Crawford knew little about investing but her science background meant she could more than hold her own in an argument about the pricing and adoption of computer memory chips.
‘On the way out he said, “if you want the job, it’s yours”,’ she recalled. The duo’s heated discussion convinced her that she could bring her insights to the firm’s culture and its growth-focused investment philosophy.
‘I came from an academic-focused place where you’re trying to really understand what the truth is and bring different points of view to the table,’ she said. ‘I was impressed that Dan didn’t want me to fit into a mold.’
Different opinions welcome
This is part of the Alger tradition. Since the very start, the company has been known for its inclusive debates on stocks – often featuring junior staff members, who are more likely to bring fresh insight into the conversation specifically with regard to newer platforms such as TikTok.
And Crawford continues this tradition. ‘I think the need for diversity of thinking is essential, and I’m perhaps a perfect example of that. I often bring a completely different perspective to some of our names. Dan is a lawyer, and one of the things I’ve loved about working with Dan has been that he’s totally outside of the box,’ she said.
This ideology extends to the firm’s recruitment policy. ‘Often, people with MBAs are molded in the same way: they’ve been given the same script to repeat.’ Crawford notes that the firm hires undergrads so they can “blossom” in a way that might not have been possible if they had come out of an investing mold.
It makes sense to encourage diverse thinking at Alger, Crawford pointed out, since growth as an investing concept is fundamentally bound up with change.
Executive vice president and portfolio manager
Practice what you preach
‘When we think about growth, what we often ask is: where’s the change? It’s about finding businesses that are creating change and that are re-inventing their markets,’ she said.
Crawford is excited at the prospect of Alger continuing to innovate as a product leader. ‘We invest in innovative companies, but we bring that thread of innovation in the way that we think about Alger as well. As we look forward, I think there are so many different opportunities to innovate in our business.’
As examples, she highlighted active ETFs and other new product growth. ‘If there’s any team and any leadership circle that could launch new products and be successful at it, I think it’s ours – in part because of the singular focus that we have on growth,’ she said.
‘We can really bring new and exciting products to the table that could be highly successful. This is what excites me most about Alger. We’re not willing just to let the market dictate what we do. We can actually lead it because that’s who we are.’
Ankur Crawford isn’t your typical large cap growth equities manager. After graduating in both Mechanical Engineering and Materials Sciences and Engineering from Berkeley, she pursued an MS and PhD from Stanford University in Materials Science and Engineering. Further down the line, she was awarded fellowships from the prestigious Intel PhD Fellowship Program and the National Academy of Sciences, Engineering and Medicine.
Crawford, who holds several US patents, joined Alger in 2004 and quickly moved up the ranks through the firm’s training program – from research associate to analyst to the head of the technology sector and now portfolio manager. Today she is one of only a handful of members of the Alger Partners Plan, which recognizes key employees at the organization as leaders designated to help grow the firm.
As part of her commitment to increasing the number of women in finance, Crawford is a mentor to other women and her peers at Alger. She is passionate about ensuring that women can raise families while maintaining a strong career and was named a See It, Be It role model as part of InvestmentNews’ 2022 Excellence in Diversity, Equity & Inclusion.
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