Overview
Ownership
SouthernSun Asset Management, LLC (“SouthernSun” or the “Firm”) was founded in 1989 by
Michael W. Cook and is located in Memphis, Tennessee. SouthernSun is wholly owned by its
employees, directly or indirectly, with Michael W. Cook and Phillip W. Cook each owning
>25% of the firm’s equity.
Advisory Services
SouthernSun provides investment advisory services for our clients using a proprietary
investment research process based on fundamental analysis. We invest primarily by taking
long positions in the equity securities of companies that we believe meet our research
criteria. SouthernSun primarily focuses its investments in companies that are in the small
capitalization to small-to-mid (“SMID”) capitalization range of the equity markets. Our Small
Cap Strategy and SMID Cap Strategy consist primarily of companies based in the United
States.
Subject to the approval of SouthernSun, clients are permitted to implement client-specific
investment guidelines and restrictions on accounts that SouthernSun manages that may
differ from SouthernSun’s standard investment strategy guidelines. Prior to the execution of
the client agreement, we may review and refine the requested investment guidelines and
restrictions in order to meet the client’s needs while also providing us with sufficient
discretion to properly invest the client’s assets in a manner consistent with our process and
philosophy. Types of restrictions include, but are not limited to, specific holdings, cash
minimums/maximums, and/or industry concentration maximums/minimums. In some
instances, certain investment restrictions imposed by a client may increase the client
account’s concentration in certain sectors, securities, or cash instruments, for periods of
time, especially in comparison to other client accounts that follow a similar investment
strategy with limited or no investment restrictions. Further, this could lead to significant
performance dispersion between such client accounts.
Wrap Fee Programs
SouthernSun provides portfolio management services to certain clients by participating in
wrap fee programs sponsored by unaffiliated broker-dealers or investment advisers (the
sponsors). The wrap program sponsors are responsible for determining suitability and
recommending SouthernSun as an investment adviser, monitoring and evaluating
performance, providing any client statements, executing portfolio transactions without
commission charge, providing custodial services for the client's assets, and/or providing any
combination of these or other services, all for a
single fee paid by the client to the broker-
dealer. SouthernSun receives a portion of the fee for providing portfolio management
services to the clients participating in the wrap fee programs. When trading on behalf of
wrap fee accounts, SouthernSun seeks best execution; however, trades for wrap fee program
accounts are typically directed to the wrap fee program sponsor (or its designated broker-
dealer). In such situations, SouthernSun will typically trade a wrap fee program’s accounts
separately from other accounts being managed within the same strategy. As described in
“Item 12- Brokerage Practices,” while directed brokerage is designed to benefit the wrap fee
program account through lower trading costs, there will likely be some circumstances where
directed trades do not receive as favorable of a price, or where dividing the trade into
separate components will inhibit SouthernSun’s ability to obtain the same level of or as
timely an execution as it may otherwise have been able to obtain if it had been able to execute
the entire trade with one broker-dealer. Trading limitations with these types of accounts
make trading away from the sponsor difficult. To the extent that SouthernSun trades away
from the sponsor by placing trades with a different brokerage firm, the client will typically
incur the costs associated with this trading, in addition to the wrap fees normally payable.
Clients who enroll in these programs should satisfy for themselves that the sponsor is able
to seek best execution of transactions. Accounts that SouthernSun manages through wrap
fee programs are generally managed in the same manner as other accounts received from
other sources.
Unified Managed Account (“UMA”) Portfolios
SouthernSun provides model portfolios to the sponsors of multi-manager, multi-discipline
investment products and diversified manager allocation products. In these instances,
SouthernSun does not have discretionary investment authority over individual security
portfolios. Another manager, typically the program sponsor or its affiliate, is the
discretionary investment manager and is responsible for monitoring the individual needs of
the client. Typically, SouthernSun provides a static model to such managers and updates this
model only when actual target weighting changes occur. In limited instances, SouthernSun
provides additional trading information to certain UMA managers based on contractual
obligations and/or the sophistication and capabilities of the UMA manager’s methodology
for receiving such information.
AUM
As of 12/31/2023, the total discretionary assets under management by SouthernSun were
$906,408,000.