Managed Accounts

Small Cap Value Strategy

Product Highlights

  • Employs a time-tested “evolutionary investing” process in portfolio and stock selection
  • Favors long-term investments in companies improving in ways short-term investors often miss
  • Intensive and continuous proprietary analysis on each portfolio company creates unique insights
  • Consistent philosophy and process in all market environments

Investment Strategy

We Believe in Evolution. Cortina’s Small Cap Value Strategy invests in companies that are improving in ways the Wall Street herd has yet to appreciate. Most investors easily recognize seismic shifts. However, the less obvious, incremental changes frequently go unnoticed, yet can yield significant returns over time. Bottom-up fundamental research and in-depth knowledge of individual companies is often the most effective way to uncover those changes and create opportunities to own good companies at attractive valuations.
We believe in five guiding principles:

  • Companies that do not evolve fall behind
  • Do not confuse data for analysis
  • Cheap does not always equal value
  • The best risk control is thorough due diligence
  • Always be mindful of the big picture

We take a long-term perspective on each investment and use temporary disruptions as opportunities to own companies that are significantly improving. The key is to separate those companies that actually can improve from those whose best days have passed.

Investment Process

The Cortina Small Cap Value team spends, on average, over thirty hours researching each investment idea before purchasing an initial position. The process has three key steps: Create proprietary research, generate internal estimates independent of consensus, and get to know managements well.


Prospective additions to the portfolio are diligently researched, documented, and thoroughly vetted by the entire team. Each position has defined and identifiable catalysts, with specific price targets based upon our own forecasts and the most appropriate valuation measures. We strive to invest in good businesses and management teams, not fads or trends, and we believe active involvement with company managements can create positive outcomes. Understanding the macroeconomy and secular shifts within industries weeds out value traps while investment and valuation discipline is strictly enforced by weekly reviews of each holding. We sell when a company reaches our internal targets or demonstrates evidence of fundamental deterioration.

Portfolio Construction

We believe the best way to outperform the benchmark is to invest in our best ideas and not strictly adhere to an index. Our portfolios are built from the ground up. The Small Cap Value portfolio typically owns between 60-80 companies with a targeted turnover of 50%-70%. The Small Cap Value’s benchmark is the Russell 2000 Value Index.

Performance as of June 30, 2018

Investment Team


Cortina Asset Management, LLC (“Cortina”) is an independent investment management firm established in 2004. Cortina manages small cap equity assets in the U.S. The firm has no subsidiaries or related asset management firms.


Cortina Asset Management claims compliance with the Global Investment Performance Standards (GIPS®).


To receive a complete list and description of composites and/or a compliant presentation that adheres to the GIPS®, please call 414-225-7399.


The Cortina Small Cap Value composite numbers consist of all fully discretionary, fee-paying accounts greater than $1 million invested in our Small Cap Value Strategy. This composite was created in July of 2011.


Returns are calculated on a total return basis, including all dividends and interest, realized and unrealized gains or losses, and are net of all brokerage commissions, execution costs and without provision for federal and state income taxes. Securities transactions are accounted for on trade date. Cash and equivalents are included in performance returns. Composite returns are calculated daily. Quarterly returns are calculated by geometrically linking the daily returns for each day in the quarter, and annual returns are calculated by geometrically linking the daily returns for each day in the year. All returns presented are calculated using U.S. Dollars.


Gross returns are presented before management and custodial fees and include dividends and interest, realized and unrealized gains or losses, and transaction costs. Net returns are presented after actual management fees, but include dividends and interest, realized and unrealized gains or losses, and transactions costs. A client’s returns will be reduced by the management fees and other expenses it may incur in the management of the account. For example, an actively managed account of $20 million with an annual rate of return of 10% compounded over a 10-year period that was charged a management fee of 1%, would achieve a net-of-fee return of 136.7%; compared to a gross-of-fee return of 159.4% based on the same assumptions.


The benchmark for the Cortina Small Cap Value Composite is the Russell 2000 Value Index. The Russell 2000 Value Index measures the performance of small cap value segment of the U.S. equity universe. It includes those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Value Index is constructed to provide a comprehensive and unbiased barometer for the small cap value segment. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small cap opportunity set and that the represented companies continue to reflect value characteristics. Benchmark returns are not covered by the report of independent verifiers.