Los Angeles Capital Management (LACM) A Global Quantitative Equity Manager



LACM at a Glance

As of December 31, 2023

$34.6B firmwide assets under management, USD
21yrs innovation in quantitative investment management
100% employee ownership through parent entities

NLP Can Help Identify Linkages Between Equity Market Peers

Artificial Intelligence and Machine Learning models have shown promise in improving forecasting accuracy across a wide range of problems, such as image and speech recognition, text translation, and medical diagnosis. In this feature article with IPE, LACM’s Co-CIOs, Ed Rackham and Hal Reynolds, discuss how Natural Language Processing, a subset of Machine Learning, can help to identify linkages between equity market peers.

What's Next for High Quality Growth Stocks?

The past eight years are an important reminder that the largest companies may dominate for extended periods of time, so how should investors evaluate the dominant competitive positions and fundamental momentum of these companies? In this article with P&I, Hal Reynolds, Co-CIO, and Sidharth Madan, Associate Director, Research, discuss different factors investors may focus on in their search for more consistent active returns.

Will Growth Continue to Outperform Value?

Growth beat value in the first half of 2023, but will its outperformance last? In a discussion with Institutional Investor, LACM’s Co-CIO and Co-Founder Hal Reynolds offers his thoughts on why better economic conditions are likely required for value to make a sustainable rebound.

Any opinions expressed in this publication are current only as of the time made and are subject to change without notice, and the Firm assumes no duty to update any such statements.

AI in Investment & Financial Services

Co-CIO and Co-Founder of LACM Hal Reynolds spoke to the Financial Times about the outlook for the integration of AI technologies across the investment management arena. Machine learning and Natural Language Processing plays a role in LACM’s forward-looking, adaptive process, enabling the Firm to harness investors’ changing expectations as key inputs to its proprietary dynamic model.

Our Mission

Achieving Client Success Through Research and Technology

LACM challenges the conventional wisdom that market environments dictate manager success. The Firm recognizes that investor preferences shift and change as market cycles evolve, and that long-term factor behavior does not guarantee future outperformance.

As such, LACM employs a dynamic, forward-looking, and adaptive approach, centered around Investor Preference Theory®, and implemented via its proprietary stock selection model.

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Our Approach

LACM's investment philosophy is underpinned by its proprietary concept of Investor Preference Theory®.

Investor preferences and risk tolerances change as the market evolves, and long-term historic factor behavior is not always an accurate indication of future performance and returns.

This innovative and dynamic concept forms the DNA of LACM's investment process, guiding the research team in its search for alpha. Los Angeles Capital's Dynamic Alpha Stock Selection Model® seeks to avoid historical biases in favor of capturing and incorporating the views of today's equity investors, resulting in portfolios that adapt to the current economic environment.

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Strategies

LACM forecasts returns and risks on equity securities globally, tailoring portfolios to meet specific investor requirements.

The Firm presently offers over 20 equity strategies*, with products aggregated into broad categories such as Global Equity, U.S. Equity, Non-U.S. Equity, Emerging Markets Equity, Active Extension, and ESG.

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*As of December 31, 2023

Investors should conduct their own analysis and consult with professional advisors prior to making any investment decisions. Diversification does not eliminate the risk of experiencing investment loss. Past performance is not a guarantee of future results. Investment process is subject to change.

Our History

LACM's Two Decade Journey

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2022 Los Angeles Capital marks its 20 year anniversary.

2021 Long Term Growth, Relative Value, and Climate Opportunities factors incorporated into DA framework as part of the stock selection process.

2021 DDR factor enhanced by integrating a new financial risk penalty.

2021 Success factor enhanced with the addition of an industry-specific model utilizing machine learning techniques.

2021 Joined IIGCC and participated in working groups aligned with Paris Investing Initiative.

2020 Launched proprietary Analyst Insight Model factor utilizing approximately 70 components to measure analyst sentiment.

2020 Launched US Microcap Equity Strategy.

2020 Became a CDP Signatory.

2020 Signed on as a SASB Alliance Member.

2020 Joined the Climate Action 100+ Initiative.

2019 Publicly declared support for the Task Force on Climate-Related Financial Disclosures (TCFD).

2019 Launched World Small Cap Strategy.

2016 LACM Global, Ltd. registered with the FCA.

2016 Passed $20 billion in AUM.

2015 Formed LACM Global, Ltd, a wholly-owned U.K. subsidiary.

2015 Became a Signatory of the PRI.

2014 Launched first ACWI ex-U.S. portfolio.

2013 Introduced first 130/30 Active Extension portfolios for U.S. Large Cap Value and EAFE.

2013 Launched a Collective Investment Trust incorporating our U.S. Large Cap Growth strategy to service the 401K market.

2012 Launched first EAFE portfolios.

2012 Firm passed $10 billion in AUM.

2011 Initiated the Los Angeles Capital Management Committee to oversee day to day Firm activity.

2011 Formed Los Angeles Capital Global Funds PLC in Ireland, an affiliate of Los Angeles Capital to manage money for non-U.S. clients in UCITS registered investment funds.

2011 Established dedicated Portfolio Risk Management Department within the Research group.

2011 Global Managed Volatility product funded.

2009 Investment universe expanded to Emerging Markets securities.

2007 Passed $5 billion in Firm assets under management.

2007 Investment universe expanded to Pacific Basin securities through the completion of Japan and Asia Ex-Japan models.

2006 Investment universe expanded to European securities through the completion of research on the European Model and associated factors. First MSCI European mandate funded.

2006 130/30 portfolio funded to capture higher information ratios in large cap portfolios.

2002 Founding principals build an independent, client-centric firm, focused on the Dynamic Alpha Stock Selection Model® and the proprietary technology used in managing quantitative active equity portfolios.