Rezo Kanovich
The team has a differentiated approach to international small- and mid-cap investing that emphasizes long-term ownership in high-quality companies with structural tailwinds and idiosyncratic drivers of value, a contrarian approach to valuation and prudent risk management.
The team seeks long-term investments in high-quality businesses that are led by excellent management teams, are exposed to structural growth themes and can be acquired at sensible valuations in a contrarian fashion.
The team looks for companies that are backed by long-term tailwinds and whose success is less dependent on a cyclical backdrop. Portfolio companies operate at the intersection of growth and change, where ingenuity can drive disruption within industry value chains.
The team seeks to identify smaller companies on a journey to becoming much larger, globally relevant industry leaders within their respective niches. Characteristics of companies the team looks for include differentiated and defensible business models, talented management teams, unique assets, strong balance sheets, healthy cash flow generation, the ability to self-fund growth, pricing power and structurally high or improving returns on invested capital.
The team seeks to invest in high-quality businesses in a contrarian fashion. Mismatches between stock price and long-term business value are created by market dislocations, temporary slowdowns in individual businesses or misperceptions in the investment community. The team also examines business transformation brought about by management change or restructuring.
International small- and mid-cap equities have unique investment risks. The team manages these risks by maintaining a long-term orientation, understanding the direct and indirect security risks for each business and, most importantly, assessing the probability of permanent capital impairment. They do not equate risk with short-term share price volatility. Other risk management tools include constructing a well-diversified portfolio across industries, geographies and themes and sizing positions according to the magnitude of opportunity, assessment of an individual business’ risk, and level of conviction.
Rezo Kanovich is a managing director of Artisan Partners and founding portfolio manager of the International Small-Mid team. In this role, he is the portfolio manager for the Artisan Non-U.S. Small-Mid Growth Strategy.
Prior to joining Artisan Partners in October 2018, Mr. Kanovich was a portfolio manager at OppenheimerFunds for the International Small-Mid Cap Strategy from January 2012 through September 2018 and was an analyst for the Global Equity Strategy for six years before becoming a portfolio manager. Earlier in his career, Mr. Kanovich was an analyst at Boston Biomedical Consultants, an investment banker with the Lehman Brothers mergers and acquisitions team and a consultant at PricewaterhouseCoopers. Mr. Kanovich holds a bachelor’s and master’s degree in international economics and finance from Brandeis University and a master’s degree in business administration, dual concentration in finance and health care systems, from the Wharton School, University of Pennsylvania.
