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Tacoma’s Point Defiance Capital Management, run by three Russell Investment alums, gets international attention

Post by Kathleen Cooper / The News Tribune on March 28, 2013 at 2:35 pm with No Comments »
March 29, 2013 8:09 am
Paul Carter (left), Susan Robertson and Brad Lawson operate Point Defiance Capital Management from their offices in Wells Fargo Plaza. Photo taken March 26, 2013. Peter Haley, staff photographer
Paul Carter (left), Suzan Robertson and Brad Lawson operate Point Defiance Capital Management from their offices in Wells Fargo Plaza. Photo taken March 26, 2013. Peter Haley, staff photographer

A small investment fund run by three Tacomans out of a quiet office downtown is receiving international attention for best practices and performance.

Point Defiance Capital Management was recognized last week with a Global Emerging Manager Award, for its best practices and business success among young or small firms. PDCM put Tacoma on the list with the nine other winners, who run their businesses out of cities naturally associated with high finance: New York. London. Singapore.

“We’re still a very small firm but we try to have the infrastructure and procedures of a much larger firm and do it like, if not the big boys, the medium-sized boys,” PDCM founder Brad Lawson said this week. “This isn’t like a couple of people in their boxers at the kitchen table picking stocks.”

All Russell Investments alumni, Lawson, Paul Carter and Suzan Robertson make up PDCM, which launched the Point Defiance Microcap Fund in 2009. It’s one of the few hedge funds run from Pierce County, and it invests in small publicly traded U.S. companies, which have less than $500 million in market capitalization.

“The reason we do that is that there’s a lot less eyes on them, and it’s a better opportunity to know the companies,” Lawson said. “It’s a lot of fun. You get to talk to senior people at the company, whereas with the larger companies we wouldn’t get within shouting distance.”

Robertson’s very presence at PDCM is one of the best practices that set it apart. She works primarily on regulatory compliance, operations and client services, something that firms the size of PDCM usually outsource. The firm also received credit for its monthly flash reports and quarterly letters to clients, communication above and beyond the required regulatory notices.

Not just anyone can invest in the fund. PDCM is open only to “accredited” investors — a limited group of individuals with a net worth of at least $1 million, or institutional investors. Many other factors apply, including the investor’s “suitability.”

Regulations in Washington state are quite strict when it comes to investment funds advertising their services — they basically can’t publicly discuss anything, from number of clients to performance. So Lawson, Carter and Robertson would not share even the most basic details about the fund in an interview. However, many of the details are available through the Securities and Exchange Commission.

As of Dec. 31, the most recent data available, PDCM managed $8.3 million on behalf of 8 clients, mostly individuals. A minimum investment of $250,000 is required. The managers are paid a percentage of the assets under management, as well as performance-based fees.

Lawson said working from Tacoma suits them fine, particularly for himself and Carter, who each have small children.

“My commute’s 12 minutes, door to door,” said Robertson, whose three children are grown. “That is a huge plus.”

Tacoma also allows the firm to keep its autonomy. “There’s a lot of me-too behavior in this industry. Everyone follows each other,” Lawson said. “If you’re in Greenwich, Connecticut, you can throw a rock at twenty hedge funds. We like being here by ourselves and thinking independently.”

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