We are excited to share that Evolutionary Tree’s story and unique approach to innovation investing were featured in Citywire, a provider of news and analysis on investment managers to advisors and institutional investors around the world. If you haven’t read the article, you can find it in Citywire’s November 2022 issue, where Evolutionary Tree is showcased as the “Boutique of the Month.”
Although we hope you read the article in its entirety, here are a few excerpts:
Firm Founding and the Boutique Advantage
Ricketts wanted to build a tight-knit team with a ‘boutique approach’ – one where analysts and PMs worked more closely. And he wanted to focus on picking stocks of companies that were innovating and launching next-generation products.
‘I felt we were moving into an economy where innovation was becoming more prominent. Building a firm that specializes in innovation investing was something that the marketplace needed, but [done] in a risk-managed fashion,’ he said.
Investment approach
Evolutionary Tree focuses on three units of analysis: identifying important innovators, figuring out what they are innovating and how meaningful those innovations are, and identifying long-term secular trends that Ricketts calls ‘evolutionary shifts.’
‘We find innovators, dig in and do fundamental deep research on what they’re innovating in,’ Ricketts said. ‘We like finding these emerging innovators that the traditional growth managers haven’t caught on to because maybe they haven’t shown up on those growth screens yet. But we know they’re innovating in important ways and are well positioned to deliver future sustainable growth that will eventually show up on the growth screens. That allows us, at least theoretically, to get ahead of traditional growth.”
While 2022 was a difficult year for growth investors, we believe the boutique advantage described in the Citywire article, along with Evolutionary Tree’s focus on important innovations and quality innovators, can add value for our clients over the long term. Quality innovators are best able to drive value creation when they are held over many years—including through inevitable periods of underperformance and market or economic turmoil that will periodically occur—as their innovations gain adoption over time.
To learn more about the boutique advantages of investing with Evolutionary Tree, read our blog post: Why Boutiques Have an Advantage in the Age of Innovation. Be among the first to know when we’ve published our views on investable innovation by subscribing to our blog.
