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A Solid Mid-Cap Fund Focusing on Owner-Operator Firms

Tony Thomas

Tony Thomas: Bill Nolin, lead manager of Silver-rated Principal MidCap, makes successful investing look simple. By favoring owner-operator firms (or companies with management teams that think like owners) and sticking with winners, he's built an enviable 17-year track record that ranks near the top of its class.

Nolin believes that owner-operator cultures tend to allocate capital efficiently with an eye toward the long term. When he finds such well-managed companies, Nolin follows the same principles, allocating capital efficiently while investing for the long term. The results are impressive. From Nolin's December 2000 start through the end of 2017, the fund's 10.7% annualized total return doubles up its mid-growth category average and leads the best-fit Russell Mid Cap Growth Index's 9% gain. On a risk-adjusted basis, these returns are tops among his peers.

Meanwhile, Nolin is crafting an investment culture around him that reflects his expectations of corporate leaders. He is heavily invested in his fund, and he and comanager Tom Rozycki manage a seven-person research team with a healthy mix of experience and youth. Together, this team--a boutique within Principal that's aptly named Aligned Investors--is well-positioned to continue Principal MidCap's solid long-term record.