Our History and Organization
Sarofim International Management Company, also referred to herein as the firm, was established
in November 1993 as a wholly owned subsidiary of Fayez Sarofim & Co. Fayez Sarofim & Co.
was founded in August 1958 by Fayez Sarofim, who continues to lead Fayez Sarofim & Co. as
Chairman, and Co-Chief Investment Officer.
Sarofim International Management Company is focused on the investment counseling business.
Sarofim International Management Company is registered under the Investment Advisers Act of
1940, as amended, and regulated by the Securities and Exchange Commission. The firm’s
registration as an investment adviser does not imply a certain level of skill or training. Fayez
Sarofim & Co. is also a registered investment adviser.
Sarofim International Management Company is a wholly-owned subsidiary of Fayez Sarofim &
Co., which itself is a wholly-owned subsidiary of The Sarofim Group, Inc., which is 100 percent
owned by current, active employees of Fayez Sarofim & Co. and members of the Sarofim
family. Sarofim International Management Company is principally owned by the Sarofim SGI
Voting Trust, which is the majority shareholder of The Sarofim Group. The Sarofim SGI Voting
Trust is controlled by Christopher Sarofim, the Chairman of the firm. The Sarofim Group is the
ultimate corporate parent of a group of affiliated companies that generally operates as a single
advisory business and includes the firm, two other registered investment advisers, and other
business entities. The other registered adviser affiliates are:
Fayez Sarofim & Co.
Sarofim Trust Co., LTA
The firm is also affiliated with Sarofim Realty Advisors, LLC which is a separately registered
real estate investment adviser. Sarofim International Management Company is a separate legal
entity, and we have our own Board of Directors and elected officers. To a substantial extent,
however, our directors and officers are the same as the directors and officers of Fayez Sarofim &
Co. As the oldest and largest member of the group of registered advisers, Fayez Sarofim & Co.
plays the leading role in providing investment advisory services and operational management on
behalf of Sarofim International Management Company for our clients. For example, the
Investment Committee of Fayez Sarofim & Co. performs the same function for our firm.
Additionally, the investment strategies offered and research used by Sarofim International
Management Company are the same as the investment strategies offered and research generated
at Fayez Sarofim & Co. From a compliance and regulatory perspective, we have adopted Fayez
Sarofim & Co.’s compliance policies and procedures, and we rely on Fayez Sarofim & Co.’s
personnel to undertake regulatory requirements such as filings with the SEC.
Sarofim International Management Company had client assets under management of
approximately $1.1 billion as of December 31, 2023. On the same date, the total client assets
managed by the firm and its investment adviser affiliates, were approximately $34.0 billion.
Please refer to “Our Advisory Services” below for a discussion of the client assets managed by
Sarofim International Management Company on a discretionary and non-discretionary basis.
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Our Advisory Services
Sarofim International Management Company provides investment supervisory services and other
investment advisory services to a broad range of clients. Portfolio managers at the firm operate
within the guidelines set by our Investment Committee. The Committee, chaired by Mr.
Sarofim, is comprised of six senior investment professionals and five sector leaders that serve in
a non-voting capacity. The Investment Committee is responsible for the firm’s portfolio
structures and all investment decisions. The firm’s advisory services are detailed in the
applicable governing documents, separate account agreements and other offering documents.
The firm has and may in the future enter into side letters or other similar agreements with certain
investors that have the effect of establishing rights (including economic or other terms) under, or
altering or supplementing the terms of, the relevant governing documents or separate account
agreements with respect to such investors.
Large Capitalization Equity Product
Sarofim International Management Company’s primary investment product is our Large
Capitalization Equity Product, which is available to both institutions and individuals.
Our equity strategy is focused on domestically traded common stocks with large market
capitalizations and high daily trading volumes. American Depositary Receipts, preferred stocks,
and foreign stocks may also be included if permitted by client guidelines. We seek to invest in
the stocks of high quality, financially sound industry leaders that have an expanding global
presence. We seek to maintain an investment perspective of at least three to five years, which
generally results in low portfolio turnover and is typically tax efficient for taxable investors. Our
strategy does not use derivatives, options, short-selling, leverage, or initial public offerings. We
do not attempt to time the market.
Global Equity Product
Institutions and individuals seeking greater international equity exposure may wish to invest in
Sarofim International Management Company’s Global Equity Product. While the investment
approach is similar to that of our Large Capitalization Equity Product, the Global Equity Product
has a larger concentration in foreign-based companies and may include shares that are not traded
on domestic exchanges.
Global Equity Product portfolios primarily have their assets in common stock, ordinary shares,
or American Depository Receipts. We focus on high quality multinational companies with large
market capitalizations. Generally, at least 25 percent of assets are invested in companies
organized in the United States and at least 25 percent of assets are invested in companies
organized in other countries. We maintain an investment perspective of at least three to five
years, which generally results in low portfolio turnover and is typically tax efficient for taxable
investors.
You can access this product by opening a separate account with the firm; by investing in the
BNY Mellon Worldwide Growth Fund, which Fayez Sarofim & Co. sub-advises, and non-US
investors may access this product by investing in the Sarofim Global Equity Fund for which
Fayez Sarofim & Co. serves as investment manager.
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International Equity Product
Institutions and individuals seeking discrete international equity exposure may wish to invest in
Sarofim International Management Company’s International Equity Product. The International
Equity Product shares an investment approach consistent with our other products, with the key
point of differentiation being its exclusive focus on internationally domiciled companies.
International Equity Product portfolios primarily have their assets in common stock, ordinary
shares, or American Depository Receipts. The International Equity Product invests in the stocks
of high-quality international companies with large market capitalizations and does not seek
specific geographic exposures. Stock selection is primarily driven by the assessment of a
company’s total return potential over a three-to-five-year investment horizon, which results in
low portfolio turnover and is typically tax efficient for taxable investors.
You can access this product by opening a separate account with the firm.
Concentrated Equity Product
Institutions and individuals seeking a concentrated portfolio composition may wish to invest in
Sarofim International Management Company’s Concentrated Equity Product. While the
investment approach is similar to that of our Large Capitalization Equity Product, the
Concentrated Equity Product owns more concentrated positions in our highest conviction
holdings.
Concentrated Equity Product portfolios are primarily invested in domestically traded common
shares with large market capitalizations and high daily trading volumes. American Depositary
Receipts, preferred stocks, and foreign stocks may also be included if permitted by client
guidelines. Concentrated Equity Product portfolios will typically be comprised of 15-30 stocks
with a maximum weighting of 20% of the portfolio in a single security. Stock selection is
primarily driven by the Investment Manager’s assessment of the stock’s total return potential
relative to downside risk and not by adherence to a singular “growth” or “value” strategy. As
such, the composition of the portfolio will vary depending upon market conditions and the
opportunities available in the market at any given time. As a result, the portfolio is likely to
experience a higher level of turnover and volatility than the Large Capitalization Equity Product
and is not managed for tax efficiency.
You can access this product by opening a separate account with the firm.
Equity Income Product
The Equity Income Product seeks income and long-term capital appreciation by primarily
investing in large capitalization domestic equities and other income-producing securities. Over
periods of three-to-five years or longer, we strive to achieve a growing stream of income and
total returns in excess of the income generated.
Our Equity Income investment strategy primarily utilizes common stock, ordinary shares, and
American Depository Receipts of high-quality companies based either in the United States or in
other countries. Companies represented in the portfolio typically have market capitalizations of
at least $5 billion. Using fundamental analysis, we seek to identify companies in business
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segments that have demonstrated the ability to maintain and grow earnings with a desire to return
increasing amounts of cash to shareholders.
You can access this product by opening a separate account with the firm.
Core Fixed Income Product
Sarofim International Management Company also offers a Core Fixed Income Product, which is
available to both institutions and individuals. Our fixed income strategy emphasizes risk-averse
management, current income and low cash reserves. Portfolio holdings may include United
States Treasury securities, United States government agency securities, high quality corporate
and municipal bonds, high quality commercial paper, and shares of money market funds. We
select specific sectors and securities that we believe offer the best combination of quality,
liquidity, income generation, and relative value consistent with our risk parameters. Foreign
government and foreign corporate bonds are generally not part of our strategy.
Municipal Bond Portfolios
The firm also manages tax-free income portfolios, consisting of high quality municipal bonds
rated AA or higher. Portfolios are customized relative to the client’s state of residence.
Balanced Portfolios
Sarofim International Management Company will also construct balanced portfolios for
institutional and individual clients. These balanced portfolios combine the firm’s equity and
fixed income strategies in proportions tailored to client requirements.
Private Placements
From time to time, Sarofim International Management Company provides certain firm clients
with greater than $20 million invested with the firm, as well as certain third-party investors or
other persons, including the firm’s principals, personnel and certain other persons associated
with Sarofim International Management Company, investment opportunities to directly or
indirectly invest in certain privately-held companies and/or pooled investment vehicles, in each
case via a private placement.
In connection with any such private placement, Sarofim International Management Company
will endeavor to negotiate investment terms for participating clients as part of the firm’s
collective negotiations for its other client accounts and proprietary accounts participating in the
investment.
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Meeting Individual Client Needs
The firm manages its separate portfolios for institutions and individuals on an account by
account basis, taking into consideration a client’s financial resources, investment objectives, and
needs. The firm addresses individual requirements for such items as current income, cash flow,
and taxes. The firm will also vote the proxies related to securities held in a client’s account if
requested to do so by the client. Proxies are voted in accordance with the firm’s Proxy Voting
policy and established procedures. Please refer to Item 17—Voting Client Securities.
Sarofim International Management Company prefers not to be constrained by client instructions
that prohibit holding certain securities. We believe that the ability to select from the widest range
of investments that are consistent with our strategy results in higher returns over time. However,
the firm does manage a number of accounts subject to instructions that specify various
exclusions or that limit weightings in individual sectors, industries, or securities. We will accept
new accounts subject to these types of instructions as long as we do not view the proposed
directives as overly restrictive or too difficult or impossible to implement and monitor.
Discretionary and Non-Discretionary Accounts
Sarofim International Management Company manages clients’ assets on either a fully
discretionary basis or a non-discretionary basis. Currently, all of our clients have granted us full
discretionary authority to manage the investment of assets in their accounts. With full
discretionary authority for an account, we are able to do the following without obtaining the
client’s consent:
Determine which securities to buy or sell and when to execute the transactions
Determine the total amount of securities to buy or sell, subject to available funds
Determine the broker or dealer through which securities are bought or sold
Negotiate with the selected broker regarding commission rates for securities
transactions
Item 12 of this brochure provides more information on the firm’s brokerage practices, and Item
16 discusses investment discretion.
If services are provided on a non-discretionary basis, we give the client investment advice, but
we do not have the authority to implement our recommendations in the client’s portfolio without
the client’s approval. In certain non-discretionary arrangements, the client’s portfolio is not
managed by Sarofim International Management Company, and the firm provides advice only.
The information provided above about the investment advisory services provided by Sarofim
International Management Company is qualified in its entirety by reference to the applicable
governing documents, separate account agreements and other offering documents.
As of December 31, 2022, the firm managed approximately $1.0 billion in client assets on a
discretionary basis and no assets on a non-discretionary basis.
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