Conner Management Group is an investment management firm that uses proprietary algorithms to implement value and momentum investing strategies. It manages separately managed accounts for individuals and institutions. The firm's strategies include an equity income strategy, value strategy, value and momentum strategy, and option portfolio strategy. Conner Management focuses on concentrated portfolios of 10-20 stocks and aims to outperform benchmarks like the S&P 500 with its approach of combining fundamental value analysis with quantitative momentum signals. It provides quarterly performance updates to clients to communicate the drivers of returns in easy to understand terms.
3. We are an investment manager serving the interests of:
Individuals & Families
Fund Managers
FinancialAdvisors
Businesses
Institutions
We are a Separately ManagedAccounts (SMA) Money Manager.
We invest and manage accounts. The client remains in control.The client
grant us discretionary investing authority.The client can view their holdings
24/7.
We use our self-developed proprietary algorithms, emphasizing value and
momentum, to uncover opportunities for our 4 distinct strategies.
Conner Management Group
Business Overview
3
4. Conner Management Group
Philosophy – People – Process - Performance
Value & Momentum Investing: Large institutional investment managers move stock prices. They
consistently look for medium to long term investment opportunities. Therefore think like them – invest like
them – move faster than them. Use their tools – and then some. Their primary tool isVALUATION. Using
historical data CMG can see historic views on valuation. Using conventional and proprietary quantitative tools,
coupled with a deep understanding of accounting and finance, CMG identifies those stocks that are likely to be
soon discovered as attractive candidates by the market at large.
The theories of value investing are the drivers behind CMG’s proprietary algorithms. (1)We developed our
approach from the review of numerous research and white papers from the past 40 years, (2) combined broad
conclusions, (3) used statistics to develop parameters, and (4) applied experience as both an analyst and equity
investor, then (5) developed algorithms to scale the approach.
Concentrated Portfolios: CMG believes in the use of concentrated investment portfolios. The average
mutual fund has holdings of approximately 150 companies. We believe that a rewarding portfolio that exhibits
the strengths of our analysis can be formed with as little as 10 to 20 names. Our belief is that if you are going
to invest in a fund with 150 or more holdings, then a low cost index fund is a likely safer and cheaper
alternative.
We only consider stocks that trade on the major exchanges for at least 5 years. We do not consider IPO’s,
penny stocks, or thinly traded stocks.
4
5. Conner Management Group
Philosophy – People – Process – Performance
Clear Client Communication:We sincerely believe that today’s typical investment management
experience is quite poor. There is often no or little explanation about a portfolio’s quarterly
performance. In the rare instances when reports are often given, they are usually presented (1)
within the context of very high level generalities that can apply to the description of most
investment portfolios, and/or (2) use scholarly jargon that has little or no meaning to the average
non-industry person.
Since CMG uses concentrated portfolios with much fewer holdings than the typical mutual fund,
we believe that it is an easy matter to relay the news to our clients of what has driven the returns of
their portfolios. Consequently, our client’s then get to really know us and our thinking.
There have been many advances in communication and information technologies over the past
decade that can improve the service experience – emails, blogs, videos, audio recordings. After all,
it is our client’s hard earned money – why shouldn’t they know how well it is being invested. We
have found that many people feel as though they are simply depositing money into a little more than
a savings account, that might go up in price. They are almost numb to believing that there are
alternative choices that can make a real difference.
5
6. Conner Management Group
Philosophy – People - Process - Performance
CMG was founded in February 2013 by G. Mathis Conner
• Bachelor of Science – Rensselaer Polytechnic Institute
• Master of Engineering – Cornell University
• MBA – University of Chicago
Career Experience (Financial Analyst, Business Developer, Engineer)
• Mr. Conner has an exceptionally deep level of understanding of accounting and finance,
as well as thorough experience constructing complex financial models. His experience
was gained through his career work in the alternative investment space as a financial
analyst and equity investor. He participated in the equity and debt financings for over
$15 Billion of power, pipeline, mining, oil & gas projects around the world.
• As an analyst and investor for world-wide large scale infrastructure projects, Mr. Conner
regularly performed the same valuation and risk assessment activities shared by
institutional scale investment management companies.
NoteworthyAccomplishment
• Solely created and tested proprietary algorithms that reviews, analyzes and ranks nearly
4,000 stocks weekly based on appreciation potential. Algorithms incorporates both
fundamental and technical measures in addition to its purely proprietary developments.
6
7. Conner Management Group
People – Philosophy - Process - Performance
We UseA Bottom-Up Approach –We BeginWith Individual Stocks
CMG’s rigorous assessment of an individual stock investment opportunity begins first with an
assessment of value. Using our algorithms, we review, analyze, and rank nearly 4,000 stocks,
weekly, based on appreciation potential.
Our algorithms evaluate historical and forward valuations measures, using up to four different
valuation approaches across differing timeframes. Using multiple methods of valuation across a
universe of nearly 4,000 stocks we believe builds a cushion / moat in our investment selections,
and substantially increases the probability of our calls.
For all of our investments, we determine what we believe are above average probability target
prices and dates before we enter a position – giving us a benchmark to measure against over time.
While we consider the consensus earnings estimates of third party financial analysts, our algorithms
allow us to make timely calls on the prudence of an investment opportunity based on present prices
– not analyst reports that were possibly written weeks ago when market conditions differed.
7
8. Conner Management Group
Philosophy – People - Process - Performance
We Use Separately ManagedAccounts
The separately managed account arrangement is the result of continued advances in
information technology.
The most obvious differences compared to traditional investment management offerings are
(1) the account is opened and completely controlled by the client, (2) the client merely grants
discretionary investing authority to its investment manager, and (3) the investment manager
cannot withdraw funds from your account.
Clients open an account with a third-party custodian shared by the investment manager.
Transaction costs decline because transactions are shared across clients in the same strategy.
Today’s technology allows the automatic preparation of all necessary tax related documents in
a single place, something especially helpful if you have more than one account and/or using
more than one strategy.
8
9. Conner Management Group
Philosophy – People - Process - Performance
Our Client Strategies
1. Equity Income Strategy
Invests in dividend paying stocks with appreciation potential.
A long only (buy and hold) strategy, with minimal turnover.
There is no use of derivates.
There is no shorting of stocks
Invests in 10 to 20 positions at one time.
2.Value Strategy
Invests in undervalued stocks with high price appreciation potential.
A long only (buy and hold) strategy.
There is no use of derivatives.
There is no shorting of stocks.
Invests in 10 to 20 positions at one time.
9
10. Conner Management Group
Philosophy – People - Process - Performance
Our Client Strategies
3.Value & Momentum Strategy
Invests in undervalued or overvalued AND are exhibiting recent favorable price movement
and sentiment.
Takes both long and short positions as opportunities arise.
Pursues maximum profit with expected holding periods of 3 to 6 months.
Actively looks for better investment opportunities every 3 to 6 months.
Invests in 10 to 20 positions at one time.
4. Option Portfolio Strategy
A high-risk high-return potential strategy that invests in a portfolio of call and put options.
Positions based on undervalued or overvalued AND are exhibiting favorable movement and
sentiment.
Purchases in-the-money call or put options with expiration to maturity of 5 to 9 months.
There is no shorting of stocks.
Portfolio consists of 5 to 10 positions.
10
12. Conner Management Group
Philosophy – People - Process - Performance
12
Long/Short PaperTrades
6 Months: Nov. 2013 toApril 2014
Average Return: 10.8%
Average Excess S&P 500 Return: 5.9%
Average % of PotentialAchieved: 54.4%
13. Conner Management Group
What Sets Us Apart
Self-Developed Multi-Purpose ProprietaryAlgorithms
ManagedAccount Solution Provider
Value & Momentum Investment Management Firm
• ThinkWarren Buffet with engineering degrees raised in the computer age
– benefiting from the discovered success of value investing and amplifying
it with technology, and leveraging data not previously available just 10
years ago.
Concentrated Investment Portfolios
Risk Management Experience
Service Experience
13