Q:  What is the investment philosophy behind the fund?

A: Environmental impact is an important factor in our investment decisions and that's a key differentiator of our fund. The company’s roots are with Jack Robinson, the founder and a traditional fund manager, who used both back-testing and evaluation analysis to determine the positive correlation between companies that minimized the environmental impact and their returns over time.

Our focus is on small-cap growth stocks because that’s where we feel there’s most value added. It is an area where the market is inefficient and it presents an opportunity to add alpha through good fundamental research. We’re looking for companies that are positioned to be industry leaders, and that can grow by more than 20% annually over the next five years. We're also looking for stocks where the valuation is compelling and are poised to double over the next 18 to 24 months.

Q: Would you explain your definitions of “green” and “environmentally responsible”?

A: We talk about our universe in terms of cleans, greens and dirties. Clean companies are responsible, in terms of environmental impact, while green companies have a positive or proactive impact on the environment. Most of the healthcare, software, and young technology companies are clean, not green. A biotech company with innovative solution in the treatment of heart disease that has a responsible process for handling the waste stream would be a clean company.

When we define green companies, we hold them to a standard of how their actual business model is improving the environment. An example would be Whole Foods, which is promoting organic and natural foods and has 100% of its electricity needs coming from renewable sources. Solar companies and a lot of the renewable energy plays would also be labeled “green”.

We try to eliminate investing in dirty companies or companies with a negligent approach to environmental policy. We look to put as many compelling green ideas as possible into the portfolio, and the rest is filled with clean companies, which are easier to find.

Q:  British Petroleum has green gas or oil but that may appear as just another marketing tactic of a gasoline company. How do you handle such situations?

A: The transition of companies from traditionally dirty industries towards more environmentally responsible practices, can have more positive impact than most of the smaller companies combined. British Petroleum lowering its carbon footprint would indeed have some real impact. How much of it is for marketing and how much is real? That question is legitimate but we don’t get involved in that debate, in actual decisions on investments, because we’re not investing in large-cap companies. Since we're working predominately in small-cap domestic equities with growth bias, we’re not involved in inherently dirty industries.

Q:  So you would focus on ethanol or solar energy instead?

A: Yes, although we believe that right now ethanol and solar are overvalued so we’re not invested in any of those. But they are both green energy plays that we have invested in in the past. The same is true about fuel cells, wind and geothermal energy. Right now our cleaner energy plays tend to be suppliers to the wind and clean coal industries. As a nation we are not in a position to entirely replace our use of fossil fuels, so we'll continue to use them. We can however, invest in the technologies that allow us to burn them in a cleaner and more efficient way.

Q:  After you separate the dirty companies from the clean and the green ones, how large is your universe?

A: If we divide the companies in the Russell 2000 Growth Index, we'd probably end up with 10% being dirty, 20% being green, and the vast majority being clean, which is still a large universe. It is not unusual for a young company in technology, science, or consumer to have started with a bias towards behaving in an environmentally positive way.

A lot of people don’t think about it, but if you have developed an entire line around better power management for electronics, if all your designs are built to improve the efficiency of power usage, that's environmentally positive. Often these companies and technologies are fueled by a real passion from the management for behaving in environmentally responsible way. While the obvious green areas are renewable energy and natural foods, there are many other plays that fit our criteria.

Q:  Can you explain your research process?

A: We consider ourselves bottomup stock pickers and we work diligently on a lot of names that come from a number of sources. We have found that the most useful information comes from small boutique firms, as there is very little value added for us from the larger firms. They’re focused on large-caps, where 20 analysts are researching the same company, so it’s hard to add a lot of value when you’re one of 20 analysts.

We also have a considerable amount of internal capabilities. For example, Jack Robinson has been involved and active within the renewable energy and healthcare industries for over 20 years and my specialty and background is mostly in the consumer segment, particularly in the natural and organic food space.

There’s plenty of information from industry consultants and participants that we know. We also have long-lasting relationships with other managers and we regularly share ideas.

Q:  How does an idea become a holding in your portfolio?

A: Before we commit to a 5-percent position in a company, it has to pass a review of its environmental and governance practices and must have a compelling fundamental case. If we have an intriguing idea that meets our criteria for growth, our next step is due diligence on both the fundamentals and the environmental and governance issues.