Granahan Investment Management (“GIM”) is an independent, employee-owned firm that was founded
in 1985 by investment professionals with a passion for small capitalization equity investing. GIM is
principally owned by GIM Holdings, Inc. Since its founding, GIM has remained committed to the smaller
cap area of the market and has dedicated its investment expertise to serving institutions and family
offices.
As of December 31, 2023, GIM managed $3,098,868,810in total assets on a discretionary basis. GIM
currently does not manage non-discretionary assets.
Typically, GIM’s products are not tailored to the individual needs of clients. In certain circumstances, GIM
allows clients in certain circumstances to restrict and/or limit certain investments in their portfolio.
GIM currently offers these investment management products:
Small Cap Core Growth ($1 billion AUM): Our Small Cap Core Growth product was started in 1993
and has a focus on stocks with market capitalizations between $200 million and $2 billion at the
time of purchase. The client portfolio generally carries 140-160 stocks, and focuses on companies
with strong and/or accelerating earnings growth. This product is offered on a sub-advised and
separate account basis.
Granahan Focused Growth ($1.07 billion AUM): Our Focused Growth product was first offered
by GIM in January of 2012. The portfolio consists of 30-40 stocks with market capitalizations up
to $2 billion at purchase, generally in the consumer and technology sectors, which have the
potential for strong earnings growth in the portfolio manager’s opinion, and offer favorable return
potential according to a proprietary risk/reward calculation. The Focused Growth product’s
portfolio manager managed this product at another investment adviser prior to his joining GIM in
December of 2011. This product is offered on a sub-advised and separate account basis. It is also
offered to non-US clients through Granahan Funds plc, established in Ireland during 2014.
Small Cap Advantage ($362 million AUM): Our Small Cap Advantage product was created in 2015
as a small cap product. The product is a distinct combination of two long standing individual
strategies: Small Cap Discoveries, inception July 2004 and Small Cap Focused Growth, inception
July 2007. The product focuses on companies with market capitalizations between $50 million
and $2 billion. The portfolio typically holds 90-100 stocks. This product is offered on a separate
account and sub-advised basis.
Small Cap Discoveries ($17 million AUM): Our Small Cap Discoveries product was created in 2004.
The product focuses on companies with market capitalizations up to $700 million that exhibit a
critical combination of superior growth prospects and attractive risk reward profile. The portfolio
generally carries 70 to 90 stocks. This product is offered on a separate account and sub-advised
basis, as well as available to accredited investors through the private fund, GIM Small Cap
Discoveries LLC. It is available to non-US investors through the Ireland-based Granahan Funds
UCITS platform.
Small Cap Select ($229 million AUM): Our Small Cap Select product was created in March 2015.
The Small Cap Select product invests in stocks of companies with market
capitalizations typically between $200mm and $3 billion at purchase. The Small Cap Select
product seeks to invest in the stocks of companies in the small cap sector of the market that have
the ability to sustain growth through market disruption. The Small Cap Select product is a high
conviction portfolio containing +/-50 stocks with the top 15 holdings typically representing >60%
of the portfolio.
SMID Cap Select ($166 million AUM): Our SMID Cap Select product was created in March 2015.
The SMID Cap Select product invests in stocks of companies with market capitalizations typically
between $500mm and $20 billion at purchase. The SMID Cap Select product seeks to invest
in the
stocks of companies in the SMID cap sector of the market that have the ability to sustain growth
through market disruption. The SMID Cap Select product is a high conviction portfolio containing
+/-50 stocks with the top 15 holdings typically representing >60% of the portfolio.
Global Small Cap ($48 million AUM): Our Global Small Cap product was created in May 2016. The
Global Small Cap product invests in stocks of companies with market capitalizations typically
between $300mm and $5 billion at purchase, primarily representing companies in developed
markets around the world. The Global Small Cap product seeks to invest in the stocks of well-
positioned companies that have strong growth prospects when the underlying stock has an
attractive risk/reward profile. The Global Small Cap product is a high conviction portfolio
containing +/-60 holdings with a minimum of 50% of the portfolio representing US companies.
Granahan Funds plc, Dublin, Ireland: On April 11, 2014, the US Focused Growth Fund was
launched in Ireland. The US Focused Growth Fund is a fund of the umbrella company Granahan
Funds plc, an Irish investment company established under the laws of Ireland, regulated by the
Central Bank of Ireland under the European Communities UCITS regulations (Undertakings for
Collective Investment in Transferable Securities). The fund’s investment strategy is to mimic, in
so far as regulations allow, the Granahan Focused Growth strategy mentioned above. This fund is
only available to non-US clients. On June 30, 2017, the Granahan Funds plc launched the US Small
Cap Discoveries Fund under the umbrella. This fund mimics the strategy of the Granahan Small
Cap Discoveries product. As with the Focused fund, the Discoveries UCITS is only available to non-
US investors. On January 22, 2020, the umbrella launched its third fund, Granahan SMID Select
Fund designed to mimic the SMID select strategy.
Small Cap Explorer: Our Small Cap Explorer product was started at the founding of the firm in
1985. This product is invested in stocks of companies with market capitalizations between $500
million and $10 billion at the time of purchase. The portfolio generally carries between 155 and
175 stocks. This product focuses on companies exhibiting the potential for increased earnings
growth. This product is offered on a sub-advised and separate account basis.
International Small Cap: Our International Small Cap product was created in 2015. The
International Small Cap product invests primarily in small cap stocks of companies in EAFE-based
countries, with up to 10% exposure to emerging markets. The universe of investable countries is
screened for stocks between $100million and $5billion in market cap, within our liquidity
requirements. This strategy deploys a critical combination of extensive bottom-up, fundamental
company research with a forward-looking expected-return tool for portfolio construction. The
portfolio typically holds +/- 65 stocks. This product is offered on a separate account and sub-
advised basis.
Non-discretionary “Model” clients: In limited cases, we provide our investment management
services on a non-discretionary basis through a “Model”. GIM does not have discretion over the
model client’s assets and therefore the client is responsible for selecting the broker and executing
trades in the market. The client, however, is not obligated to use our recommendations and
therefore we do not know if or how much of the recommended trades were completed. This is a
conflict of interest because we could be competing with the model client for the same trade. GIM
communicates model changes to the model client at the end of the day. For securities held in both
discretionary and model accounts, the discretionary clients will trade before model clients are
made aware of the recommendation. This could result in model clients and discretionary clients
receiving different prices.