@andiel049, I have been impressed by everything about GP until now, including the big investments they have in their own funds, closing funds aggressively and even more hard closing funds. As I mentioned this all screams outperformance to me and in a world where not that many managers outperform over time I don't think its a big surprise that they've gathered assets so quickly. Maybe that's the trick. They thought it might take
10 years to gather this amount of assets. They thought they would close everything at $
1.5-$2.0 billion then at $3 billion and now something larger. For all the experience they have they're conservative and they were probably too transparent about the asset levels they thought they could manage.
To answer
@JoJo26 's question, I look at this as one small cap portfolio. It helps that it's global but as opposed to many small cap fund managers who are at the top end of small cap or have a lot of assets even in mid-caps, these guys are very small cap and that would lower the assets I'd like to see in the fund(s). I think $3 billion is a great level, but I think $5 billion is probably okay, although they don't have a lot invested in the US and I think that makes $5 billion relatively larger. Once you get past $5 billion I think it starts to get more difficult to keep the market cap down or to "only" have 400 plus stocks (based on GPROX) in their collection. I'm already concerned pending their explanation but above $5 billion I think they're losing their ability to prioritize what they said they would when they closed GPROX last September.
From what I understand, the Stalwarts are just going to be another cut of GPROX and it will be limited, more or less, to the stocks with market caps greater than $
1.5 billion. That would tend to make me believe they will include the larger small caps and a good portion of the mid-caps in GPROX. There are only a few holdings that M* categorizes as large cap and while those could certainly be part of the Stalwarts, even so they wouldn't likely make up a big part of it.
@Charles, if we believe what andiel049 says, and I have no reason not to, then it's pretty clear this is motivated by pressure from institutional investors more than investment opportunities or more management fees (although clearly that goes along with more assets). Based on what I've read in commentaries, annual letters or press releases closing funds they've talked about understanding the difficulties hard closing funds causes for asset allocation, they've talked about the desire from customers for more room to continue investing, and it sounds like someone has managed to convince them they might be great at making investment decisions but they're wrong about how much money they can manage and keep making those great investment decisions. I'm trying to keep an open mind but hopefully it will help when they share some of the thinking that went into these decisions.
