The Fund invests primarily in common stocks of companies that the Osterweis Capital Management investment team believes offer superior investment value and opportunity for growth. In selecting investments, the investment team focuses on companies that it believes to be undervalued or otherwise out-of-favor in the market, but that have attractive growth prospects. Under normal circumstances, the Fund will be approximately 95% invested in equity securities.
- Bottom-up stock selection based on rigorous fundamental analysis
- Risk-aware strategy
- Experienced investment team
- Adviser is majority-owned by its employees
- $100,000 initial investment for regular accounts
- $100,000 initial investment for IRA or other tax-deferred accounts
- $100 for subsequent investments
Quarter-End Performance (as of 6/30/17) (%)
|1 MONTH||QTD||YTD||1 YEAR||3 YEAR||5 YEAR||7 YEAR||10 YEAR||
|S&P 500 Index||0.62||3.09||9.34||17.90||9.61||-||-||-||14.58|
|OSTEX||S&P 500 Index|
Gross/Net expense ratio as of 3/31/2017: 1.86%/1.01% The Adviser has contractually agreed to waive certain fees through June 30, 2018.
Performance data quoted represent past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be higher or lower than the performance quoted. Investment performance reflects periods during which fee waivers were in effect. In the absence of such waivers, total return would have been reduced.
Rates of return for periods greater than one year are annualized.
We employ a risk-averse investment strategy predicated on the belief that strong long-term investment results are best achieved through a compounding of reasonable gains and the avoidance of major losses. We, therefore, consciously strive to limit downside exposure as much as to generate upside returns.
We focus on out-of-favor, undervalued situations with low P/E, P/B and P/FCF ratios and strong or rapidly improving cash flow dynamics. We seek to avoid fads and speculatively priced stocks, where the risk of mistakes is high.
We continually search for under-researched, growth situations that can be purchased for modest multiples. As such companies gain recognition and are accorded multiples more in line with their growth rates, we may become sellers. We also tend to focus on asset rich companies with improving earning prospects. In short we often follow the old saying, “Buy assets, sell earnings.” This tends to reduce the risk of earnings disappointments.
Underlying everything we do is an intense focus on cash flow, especially a company’s ability to generate free cash flow after all expenses and capital spending. Cash flow is more real than reported earnings, which are subject to accounting manipulation. Companies that generate strong free cash flow are able to repay debt, repurchase shares, and grow through acquisitions or reinvestment in their businesses. They are also attractive acquisition targets for both other companies and financial buyers. Because of these characteristics, companies with rising free cash flow are often better able to grow, regardless of stock market conditions and, at the same time, may offer downside protection during periods of market weakness.
John S. Osterweis
Chairman & Chief Investment OfficerView Bio
John S. Osterweis
Chairman & Chief Investment Officer
John Osterweis graduated from Bowdoin College (B.A. in Philosophy, cum laude), and Stanford Graduate School of Business (M.B.A. with top honors in Finance).
After graduating from business school, he served as a Senior Analyst concentrating on the forest products and paper industry for several regional brokerage firms and later for E.F. Hutton & Company, Inc. In addition to his activities as an analyst, Mr. Osterweis served as Director of Research for two firms and managed equity portfolios for over ten years.
In late 1982, Mr. Osterweis decided to devote full time to his portfolio management activities, and in April of 1983 launched Osterweis Capital Management.
For a number of years Mr. Osterweis served as a Director on the Stanford Alumni Association Executive Board, Trustee of Bowdoin College, Director and Vice Chairman of Mt. Zion Hospital and Medical Center, and President of the Board of Directors for Summer Search Foundation. He currently serves as Immediate Past Chairman of the San Francisco Ballet Association, Director of the San Francisco Free Clinic and the Lucas Museum of Narrative Art, President Emeritus of the San Francisco Ballet Endowment Foundation, as well as Trustee Emeritus of Summer Search Foundation and of Bowdoin College.
Mr. Osterweis is a principal of the firm and a lead Portfolio Manager for the core equity and flexible balanced strategies.
Gregory S. Hermanski
Vice President, Director of Equity Research & Portfolio ManagerView Bio
Gregory S. Hermanski
Vice President, Director of Equity Research & Portfolio Manager
Greg Hermanski graduated from The University of California, Los Angeles (B.A. in Business/Economics).
Prior to joining Osterweis Capital Management in 2002, Mr. Hermanski was a Vice President at Robertson Stephens and Co. where he was in charge of convertible bond research. Prior to that, Mr. Hermanski was a Research Analyst covering convertible, high yield, and distressed securities at Imperial Capital, LLC and a Valuation Consultant for Price Waterhouse, LLC.
Mr. Hermanski is a principal of the firm, the Director of Equity Research and a Portfolio Manager for the core equity strategy.
Vice President & Portfolio ManagerView Bio
Vice President & Portfolio Manager
Nael Fakhry graduated from Stanford University (B.A. in History, Phi Beta Kappa) and the University of California Berkeley, Walter A. Haas School of Business (M.B.A., C.J. White Scholar).
Prior to joining Osterweis Capital Management in 2011, Mr. Fakhry worked as an Associate at American Securities, a private equity firm, and as an Analyst in the investment banking division of Morgan Stanley.
Mr. Fakhry is a principal of the firm and a Portfolio Manager for the core equity strategy.
Vice President & Senior AnalystView Bio
Vice President & Senior Analyst
Francis (Frank) Diebold graduated from the University of Pennsylvania (B.A. in Science, Technology and Society, cum laude).
Prior to joining Osterweis Capital Management in 2015, Mr. Diebold was an Equity Research Associate specializing in oilfield services and equipment at Jefferies LLC. Prior to that, Mr. Diebold was an Analyst covering distressed securities for the investments arm of MetLife.
Mr. Diebold is a principal of the firm and a Senior Analyst for the core equity strategy.
During the period noted, contractual fee waivers were in effect for the Osterweis Institutional Equity Fund. The Expense Cap will remain in effect until at least June 30, 2017. The Fund may reimburse the Adviser for waived expenses, and therefore, the net expense ratio could be higher than the gross expense ratio.
The Osterweis Funds are available by prospectus only. The Funds’ investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectuses contain this and other important information about the Funds. You may obtain a summary or statutory prospectus by calling toll free at (866) 236-0050, or by visiting www.osterweis.com/statpro. Please read the prospectus carefully before investing to ensure the Fund is appropriate for your goals and risk tolerance.
Mutual fund investing involves risk. Principal loss is possible.
The Osterweis Institutional Equity Fund may invest in medium and smaller sized companies, which involve additional risks such as limited liquidity and greater volatility. The Fund may invest in foreign and emerging market securities, which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks may increase for emerging markets. The Fund may invest in Master Limited Partnerships, which involve risk related to energy prices, demand and changes in tax code. From time to time, the Fund may have concentrated positions in one or more sectors subjecting the Fund to sector emphasis risk.
While the fund is no-load, management fees and other expenses still apply. Please refer to the prospectus for more information.
Osterweis Capital Management is the adviser to the Osterweis Funds, which are distributed by Quasar Distributors, LLC.