Granite Investment Partners tells Sarasota pension board market leadership is narrow; expects broadening toward industrial cyclicals

Granite Investment Partners representatives told the Sarasota Police Officers Pension Board of Trustees that U.S. equity performance has been unusually narrow in recent years, driven by a handful of large technology companies, and that their strategy expects market leadership to broaden to cyclicals and industrial sectors.

Doug Morris, a principal with Granite Investment Partners, and Eric Rollay, the firm’s lead portfolio manager on the pension account, presented an overview of the firm and portfolio. Morris said there were no changes to the ownership or to the investment team managing the board’s account and noted the firm manages roughly $3 billion across strategies.

Granite outlined a multi-part thesis: the recent market narrowness has been concentrated in what Morris called the “Magnificent 7” and other companies benefiting from AI infrastructure spending; the firm sees signs that the AI-driven, narrow leadership phase is reaching a peak of inflated expectations; and as economic cycles evolve, leadership should broaden to include industrials, manufacturing and other cyclical growth sectors. The presentation cited ISM manufacturing data and ongoing capital expenditures for power and grid modernization as drivers of a possible cyclical recovery that could surface in 2026.

Morris and Rollay highlighted specific areas of conviction: power-generation and grid modernization, industrial automation and robotics, aerospace and defense, and selected technology platforms. They argued diversification across multiple growth catalysts—beyond AI infrastructure alone—positions the portfolio for a potential reallocation of market leadership.

Trustees had no formal action tied to the presentation. Granite concluded by inviting further questions and offering to provide follow-up materials on earnings and sector exposures.