Meridian Investment is an investment management firm founded in 1994 that offers a range of equity, fixed income and alternative investment strategies. With over $25 billion in assets under management, Meridian has established itself as a leading investment manager. This article will provide key insights into Meridian’s investment philosophy, portfolio management approach, and performance track record across various strategies. Meridian takes a rigorous fundamental research-based approach to investing and aims to provide strong risk-adjusted returns over the long run. The firm utilizes both quantitative models and qualitative assessments to construct concentrated, high conviction portfolios. Meridian’s investment strategies leverage the firm’s core competencies in areas like healthcare, technology and real estate. The firm’s long-term performance across many of its strategies has outpaced relevant benchmarks.
Meridian’s Concentrated, High Conviction Approach to Investing
Meridian employs a concentrated approach in its equity strategies, typically holding 20-35 stocks per portfolio. The firm invests in its highest conviction ideas rather than diversifying broadly across the market. Meridian takes large positions in companies where it has identified a clear competitive advantage, strong management team and attractive valuation. For example, its healthcare strategy holds just 25 stocks but has generated annualized returns over 20% the past decade, handily beating healthcare indices. This concentrated approach allows Meridian’s best ideas to drive performance.
Active Management Underpinned by Rigorous Research
Meridian believes robust fundamental research is key to making sound investment decisions and generating alpha. Its investment team conducts intensive due diligence – meeting with management, analyzing financials and assessing competitive dynamics. For its real estate securities strategy, the team complements quantitative valuation models with boots-on-the-ground property visits and management meetings. Meridian does not believe markets are efficient, and aims to capitalize on informational advantages through thorough analysis of companies and industries.
Expertise in Healthcare and Technology Investing
Meridian has built specialized expertise in the healthcare and technology sectors. Its healthcare team includes portfolio managers with medical backgrounds who can analyze clinical data and assess the commercial viability of drugs. This healthcare expertise has led to standout returns, with multiple healthcare-focused strategies ranking in the top percentiles for performance. Similarly, Meridian’s technology team includes experienced software engineers who offer insights into emerging tech trends and companies. Its technology strategy has generated over 20% annualized returns for a decade, doubling the returns of technology benchmarks.
Strong Long-Term Track Record Across Strategies
Meridian has produced impressive long-term results across many of its key investment strategies. For example, its flagship large cap equity strategy has returned over 11% annually the past 20 years, outpacing the S&P 500. Meridian’s total return fixed income strategy has generated over 8% annual returns for two decades with below benchmark volatility. The firm’s quality-focused SMID cap equity strategy has returned 14.5% annually for 10 years, beating its benchmark by 4% per year. Meridian’s track record demonstrates its ability to deliver alpha over multiple market cycles.
In summary, Meridian Investment leverages high conviction, concentrated portfolios and rigorous bottom-up research to drive long-term outperformance across its equity, fixed income and alternative strategies. Its expertise in areas like healthcare and technology provides key competitive advantages. Meridian’s impressive track record reflects its active management approach and ability to translate informational edges into alpha.