Forensic Research Group (FRG) targets actionable investment ideas for
hedge fund and alternative asset managers. Using proprietary bottoms-up and top-down
screening tools, the group identifies public companies with risks it deems are not fully
discounted by public market participants. The research targets business, accounting, legal
and corporate governance risks. The research targets small and mid-cap stocks ($250M-
$5B market cap). Industry focus will be fluid based on a top-down perspective, but will
focus mostly on technology, consumer, healthcare and services industries.
Ideas typically fall into the following categories:
- Story stocks: Identify stocks with questionable earnings projections or
companies where management/backers have history of promotional activities.
- Aggressive accounting: Identify companies using aggressive accounting
where earnings are materially overstated and/or accounting irregularities could
mask fundamental weakness in business.
- Fundamental or industry shifts: Focus on flawed mergers or changes in
company strategy or fundamental shifts in industry dynamic that are not
properly discounted by market.
Started in 2003, the Forensic Research Group was previously a division of Glass, Lewis &
Co., a leading independent governance research firm. The Group was spun-out of Glass
Lewis in June 2009.
Track Record: Since 2004, investing ideas uncovered by the FRG have outperformed
the market, returning 11% on average versus a market return of 2% over the same time
period.
