Invest boldly Manage risk wisely

Competitive Advantages:

To be enduring, a competitive advantage is rarely comprised of a single element. Rather, it comes from combining multiple company characteristics and practices in a way that few, if any, other firms can match. At Millrace, five elements combine to provide our competitive advantage:


Investing in smaller companies provides the benefit of focusing on a less efficient segment of the equity market, but superior returns become increasingly hard to generate when a small cap manager grows beyond a certain point.  That same growth can also cause a firm’s culture to change subtly from one that is nimble and entrepreneurial to one that is more cumbersome and bureaucratic.  Millrace commits to limit the firm’s AUM to a capacity that ensures ongoing access to and a complete focus on smaller, less understood, more inefficiently valued companies. Plus, by limiting growth in firm AUM, the entrepreneurial culture and personal excitement of contributing to the success of a small, cohesive team is strengthened rather than diluted.


The perspective provided by having experience managing assets over multiple market cycles is invaluable in helping the team recognize opportunities in individual companies at various times in the market cycle. Millrace's culture empowers individuals to use their experience and time-proven judgment to act on their research convictions.

Risk Management

Risk management is an integral part of every aspect of our investment process rather than a final step. Our practices have demonstrated their ability to minimize drawdowns during declining markets, thus allowing capital to compound more productively.


Respecting what is not known and having the humility to recognize mistakes is critical to avoiding seriously damaging decisions. The culture at Millrace reinforces the values of independent thinking, accountability, and intellectual honesty that enables individuals to respond to changing conditions and new information productively.


The most successful active managers are able to outperform their benchmarks because they are willing to make index-agnostic decisions based on their research convictions rather than seeking to closely mirror their benchmark due to fears of underperforming. The Millrace team has conviction in our company research and our risk management practices, which is the basis for putting our very best thinking into action for our clients for a productive, long-term outcome.