Investment firm targets high-growth small caps for 20% annual revenue expansion

The Oklahoma City Employee Retirement System meeting on April 10, 2025, focused on investment strategies aimed at fostering growth in small-cap companies. The discussion highlighted the system's commitment to investing in innovative growth companies with significant market opportunities, targeting a growth rate of 20% or more over multiple years.

The investment strategy emphasizes early-stage companies, typically with market capitalizations below $5 billion. This small-cap focus allows for potential volatility but has historically yielded positive results. The management team underscored the importance of investing in companies that are not yet maximizing profitability but are reinvesting their revenues into marketing, research and development, and sales.

Key criteria for selecting investments include the uniqueness and defensibility of a company's business model against larger competitors, strong financial health with cash-rich balance sheets, and effective leadership. The management team noted that they often invest in companies led by familiar management teams, assessing their ownership stakes and compensation structures to ensure alignment with shareholder interests.

Valuation remains a critical consideration, with the team willing to pay a premium for stocks that demonstrate strong growth potential. They acknowledged that while their growth rates may occasionally dip below benchmarks, their focus on lower market caps and better balance sheets has consistently provided a competitive edge.

Overall, the meeting underscored the Oklahoma City Employee Retirement System's strategic approach to investing in small-cap companies, aiming for sustainable growth while managing risks associated with early-stage investments. The team remains optimistic about the long-term potential of their portfolio, despite market fluctuations.