Penn Capital Research
How AI Infrastructure Spending is Reshaping Small-Cap Opportunity
Penn Capital’s perspective on how the AI infrastructure buildout is creating new opportunities across small cap sectors. From energy and communications to industrials and materials, this piece highlights how hyperscaler spending could reshape the broader market for years to come.
Eric Green, CFA
Penn Capital is a boutique, SEC registered investment management firm specializing in equity and high-yield credit investing.
Our holisitc approach to investing is grounded in our belief that as equity and credit investors, we have a more informed perspective than either provides alone. By integrating both disciplines within a single investment team, our investment process is focused on fundamental research across the capital structure. Our proprietary Complete Capital Structure Analysis® enables our investment team to develop insights and identify opportunities. This customized approach differentiates Penn Capital from conventional managers and enhances our investment process.
“A complete view of the capital structure sharpens how we assess risk, value, and opportunity. We believe we are better equity managers because we are credit managers and better credit managers because we are equity managers.”
—Eric Green, CFA
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OUR STORY
Since its founding in 1987, Penn Capital has managed equity and high-yield investment strategies. Our tenured team of investment professionals combines institutional-quality fundamental research with the access, responsiveness and accountability of a boutique investment manager.
OUR STRATEGIES
Our investment process combines fundamental security selection with quantitative risk-management tools in portfolio construction. Portfolios are generally concentrated in securities that the investment team considers its highest-conviction ideas, subject to applicable investment guidelines, risk limits, and market conditions. Penn Capital may manage strategy capacity to support portfolio liquidity and implementation flexibility. These considerations inform portfolio construction and ongoing management.
CREDIT
Penn Capital has a long history of managing high-yield strategies across credit markets. We seek attractive income and relative value while maintaining a focus on downside risk, including opportunities among smaller and less widely followed issuers. Our equity expertise adds perspective to our credit analysis, while deliberate capacity limits help preserve liquidity and give our portfolio managers greater control over building and managing positions.
At Penn Capital, we focus our equity strategies on micro, small, and mid-cap companies. The investment team evaluates companies that may receive limited analyst coverage or that it believes may be mispriced based on its fundamental research. We look for opportunities where changes in the capital structure can create positive catalysts, while maintaining discipline around each strategy’s market-cap parameters, relative to its intended risk and return profile.