Small Cap Growth

The Small Cap Growth product is Sterling's flagship strategy for institutional investors. The firm's founder, Scott Sterling Johnston, has been managing institutional separate accounts in the Small Cap Growth product style since 1976, and has managed accounts for a wide variety of corporate clients, multi-employer plans, and public funds. The product is managed in a strict small capitalization style. Stocks considered for purchase have a typical market capitalization between $350 million and $1.0 billion dollars. Issues are sold as they approach 3.0% of the portfolio or a market capitalization of more than $2.5 billion. In its present form, the product began management of assets on October 1, 1996.

The Small Cap Growth strategy had over $625 million dollars under management as of June 30, 2008. The product is open to new investment and has a minimum account size of $10 million dollars.

The typical management fee charged is 1.0% percent of assets. This fee is computed quarterly and is payable in arrears. Performance fees are negotiable.

Micro Cap Growth

Sterling Johnston’s Micro Cap Growth strategy aims to create a portfolio of micro cap growth companies that can generate positive risk-adjusted rates of return over a full market cycle. Stocks considered for purchase in the Micro Cap Aggressive Growth Product have typical market capitalizations of $100-350 million dollars. Stocks are sold out of micro cap portfolios as they near the $1 billion market cap limi set within the strategy. The product was founded on October 1, 1996.

The Micro Cap Aggressive Growth product had over $395 million dollars under management as of June 30, 2008. The product is currently closed to new investment.

Typical fees for Sterling's Micro Cap Growth product include both a management and incentive fee. The management fee is equivalent to 0.75% of assets. The incentive fee is computed as 20% of profits above the benchmark Russell Micro Cap Growth index.


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SMid Cap Growth

The SMid Cap Growth strategy began in December 2003 at the request of a client who was interested in owning stocks that had grown out of the Small Cap Growth strategy’s market capitalization limit. As such, the strategy seeks to avoid security overlap with the Small Cap Growth strategy. The typical market capitalization purchase range for the SMid strategy is $1.5 – 3.5 billion with market cap limit of $7.5 billion.

The SMid cap strategy currently includes three accounts and had over $55 million dollars under management as of June 30, 2008. The product is open to new investment with a minimum account size of $5 million dollars. The management fee for the SMid Cap Growth strategy is 0.85% of assets. Performance incentive fees are negotiable.


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