First American Capital Management,Inc.
A Premier Investment Firm witha Tradition of Excellence
The mission of First American Capital Management
is to preserve capital and grow assets for our clients.
Through challenging economic cycles, we have
earned a reputation as a trusted financial steward for
institutions, foundations, and high net worth families
and individuals.
Our Mission
Our GoalThere is an upper tier of investors and investment
management whose focus is the patient, long-term
growth of assets. These are typically institutional
investors, foundations, endowments, and high net
worth individuals
with the wisdom,
persistence, and
vision to set goals
and stay the course.
Serving them are
investment advisors
with the knowledge,
discipline, and
systems to make
informed decisions, set judicious goals, and consistently
achieve strong returns against benchmarks.
First American Capital Management is privileged to
serve many top tier investors with equity portfolio
management, fixed income investments, and cash
management services. We are especially pleased that
you are considering First American Capital
Management in your current review, and we welcome
your vigorous evaluation. We look forward to the
opportunity to work on your behalf and to include you
in the circle of clients who have entrusted their invest-
ments to First American Capital Management.
A Premier Level of Management
Measuring Success
Historically, we have
consistently generated
greater returns for our
equity portfolios, fixed
income investments, and
cash management
accounts when measured
against the appropriate
benchmark. These
“excess” returns are the
best measure of our
performance.
Left to Right: Donald Kennedy, Chairman of the Board, The
First American Corporation; Mark Hoppe, President, First
American Capital Management; Robert Venable, Chief
Investment Officer, First American Capital Management
Measuring Success
Portfolio Managers and Analysts
Left to Right: Jason Nerio, Associate Portfolio Manager; Daniel Ast, CFA, Senior Portfolio Manager; Christopher Rogers, CFA, Senior Portfolio Manager;
James H. Rogers, CFA, Director of Fixed Income; Robert S. Venable, CFA, Chief Investment Officer; Minnie Giles, Portfolio Manager; David (D.K.) Willardson, CFA, Director of Equities;
Stephen Grimm, CFP, Senior Portfolio Manager; Yuka Marosek, CFA, Portfolio Manager/Senior Securities Analyst; Kevin Wilcox, CFA, Portfolio Manager/Securities Analyst
Note: Two-thirds of FACM portfolio managers and analysts are CFA® charterholders.*
Year after year, newly minted investment styles storm into the market and just as quickly depart — often leaving investor portfolios in disarray. First American CapitalManagement portfolio managers and analysts implement time and market tested methodologies designed to build portfolios and increase client assets.
Flavor ofthe Month
* CFA® is a trademark owned by the Association for Investment Management and Research.
Team ApproachThe strong returns First American Capital
Management has achieved demonstrates the rewards
of a carefully constructed investment process and its
vigorous implementation by a group of experienced
and talented people.
Our collegial system emphasizes teamwork and
pulls together the people and disciplines needed for
premier investment management. Some team mem-
bers are versed in economics and provide the macro-
economic viewpoint. Others study the policies of the
Federal Open Market Committee (FOMC), continual-
ly assessing its impact on financial markets. Our
experts in credit markets provide important insights
into the fundamental health of companies and indus-
tries. Our equity analysts focus on companies and sec-
tors with proven business models and valuations that
may not fully reflect that company’s true worth.
Contrarian viewpoints are always welcome and serve
to strengthen the decision making process.
Led by Chief Investment Officer Robert S. Venable,
this cadre of professionals provides the highest level
of investment excellence. Combining disciplined
processes, custom analytical tools, and instincts honed
over years of market cycles, the group strives to
outperform the S&P 500 benchmark year after year.
A Hierarchy of Equals
Institutional Services Team
From left: Michael Walker, Regional Director
Brey Jones, Institutional Services Associate
Anna Kjellgren, Client Services Associate
John Hauswirth, Director of Institutional Marketing
Charles Burgess, Regional Director
Zachary Carboni, Investment Associate
Kevin Maloney, Institutional Services
EquitiesOur equities strategy is based on the belief that large
capitalization equities, with their unique combination
of stability and liquidity, provide the single best vehicle
for asset growth.
Our objective is to actively manage large cap equity
portfolios and outperform the S&P 500 benchmark
over the long term.
With that foundation, First American Capital
Management has created a process to identify those
stocks that we believe provide the best opportunity
to outperform the benchmark over a three- to
five-year horizon.
This decision-making process utilizes both top-down
economic and bottom-up company specific analyses.
Top-Down Analysis
In our top-down analysis, we first review long-term
secular factors such as demographic trends, global
econometrics, and the political environment that may
influence the future relative performance of industry
sectors. We also consider cyclical factors that may
affect our interest rate and economic growth outlook.
This in-depth, top-down review is the primary deter-
minant of our allocations to the various economic
sectors represented in the portfolio. Using the sector
allocations of the S&P 500 as a starting point, we will
over- or under-weight sectors based on our analysis.
First American Capital Management’s equity portfolio
managers implement a disciplined process for identifying
and selecting individual securities that take into account
both economic and company-specific data.
Finding Opportunity
Large Cap Core Equity
Top-down economic analysis is used to determine
under- and over-weighting of sectors. Our bottom-up
process identifies the most promising individual companies
based on criteria such as market presence, management
quality, earnings, and revenue growth.
Individual Stock Analysis
We take a bottom-up approach when selecting
individual securities. Emphasizing a long-term invest-
ment approach, we choose proven companies that we
believe are good investments based on the overall
outlook for the firm. Each security is analyzed on
several fronts including products, quality of manage-
ment, market presence, earnings, revenue growth,
valuation, and other selected financial data. Our
portfolios are diversified — generally holding 50-60
securities that typically represent all major sectors
of the economy. Our universe is comprised of
U.S. stocks over $5 billion market capitalization
and ADRs of a few selected large multinational
corporations.
First American Capital Management’s proven
ability to add value through extensive research
and interpretation of fundamental and financial data
is a significant measure of the strength of our
investment process.
Well-defined guidelines
determine when an equity
holding will be considered
for sale. A mandatory
formal review is triggered
when a stock’s performance
varies from projection.
Holdings are continually
evaluated for possible sale
when unforeseen events
occur, such as earnings
surprises, valuation con-
cerns, or deterioration of
industry fundamentals.
Deciding When to Sell
Model Portfolio
Top-Down Sector Allocation
Bottom-Up Stock Selection
� Global Economy� Demographics� Political Climate
� FOMC Policy� Inflation� Cyclical Factors
� Revenue Growth� Earnings � Market Presence
� Products� Valuation� Management
Fixed IncomeAt some investment firms, fixed income takes
a back seat to equities. This is not the case at First
American Capital Management where our fixed
income team has earned a reputation for excellence
with solid performance and attentive customer service.
The hallmark of First American Capital
Management’s strategy is a disciplined approach that
enables us to consistently achieve strong results
against benchmarks while focusing on managing risk.
Risk management is accomplished by a team of
dedicated credit analysts who monitor the evolving
financial health of our investment-grade holdings in
light of current and forecasted economic conditions.
Independent professional analysis then enables the
First American Capital Management team to identify
and exploit market-pricing inefficiencies.
Finally, each portfolio is individually tailored to
meet specific client needs based on a detailed
analysis of the client’s financial position.
Fixed Income Programs are Designed to Preserve Capital and Produce IncomeRegardless of Economic Climate
Adding Value to Fixed Income Portfolios
All portfolio decisions begin with a businesscycle analysis. Here is how strategies canchange with business cycles.
Duration vs Yield CurveCycle Benchmark Strategy
Peak Shorter to No CurveNeutral Bias
Recession Longer BulletMaturities
Recovery Longer to No CurveNeutral Bias
Expansion Neutral to Barbellshorter Maturities
Institutional Liquidity Management
Entrusted with substantial liquid assets by clients,
First American’s Institutional Liquidity Group is led
by portfolio managers and traders who have in-depth
experience in the short end of the yield curve. Our
team approach and timely client reporting is designed
to provide clients with the most responsive service in
the business. All accounts are constructed with an
emphasis on safety, liquidity and competitive returns.
Short Duration
We define short duration as between one and three
years. We utilize a mix of investment grade securities
to achieve our client’s investments goals. Combined
with economic and business cycle analysis, we
manage asset mix, durations, and exploit yield-
advantaged sectors to enhance returns.
Intermediate Duration
Our intermediate core portfolio strategy seeks
maximum current income and price appreciation
with a duration of two to five years. All sectors of
the U.S. domestic bond market are utilized to add
value. We seek to outperform the stated benchmark
primarily through a top-down process including
duration management, yield curve analysis, and
sector rotation. Bottom-up analysis of credit quality
and volatility, plus cost efficient trading, adds
further value.
Our investment profes-
sionals have substantial
expertise in managing
both taxable and non-tax-
able portfolios, choosing
from the universe of
investment vehicles appro-
priate to each client’s spe-
cific needs. Our relation-
ship with a wide array of
brokers, dealers and banks
provides us with competi-
tive pricing and yields on a
wide variety of investment-
grade vehicles.
Planning An EffectiveFixed Income Strategy
Please visit The First AmericanCorporation on the web atwww.firstam.com
StrengthThe First American Corporation
First American Capital Management is backed
by the financial strength enjoyed by its parent
firm, The First American Corporation. Founded
more than a century ago, The First American
Corporation is ranked in the Fortune 500 and
Forbes 500 lists of largest corporations based on
sales. Approximately $3.75 billion in revenues has
secured First American’s position on these indices
of financial management success. The First
American Corporation, with its family of compa-
nies, has become the nation's leading, diversified
provider of business information and related
products and services. Its subsidiaries operate
within three complementary business segments:
title insurance and services, real estate informa-
tion and services, and consumer information and
services, the latter which includes First American
Capital Management, Inc. Today, The First
American Corporation has over 20,000 employees
in more than 1,100 offices in the United States
and abroad. The First American Corporation is
listed on the New York Stock Exchange and trades
under the symbol “FAF.”
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