Friends and Colleagues,

As we reflect on the years since we launched Piedmont Investment Advisors, LLC, we are proud of what we have accomplished. Our stronger sentiment at the moment, however, is profound humility and appreciation as we reflect upon all the help that so many have given us along the way. Please know that all of your names and faces have come to mind as I write this and that my profound gratitude will not be dimmed by the passage of time. A life is, after all, no more or less than what one does, how one does it, and, most importantly, whom one does it with and for. So again, thank you for being there. Thank you for walking with us and giving us the opportunity of a lifetime to practice my chosen craft in a way that is professionally satisfying and that offers the prospect of attractive rewards for all who participate.

For those of you who are unaware the term piedmont is most commonly used as a geographic reference to regions of small rolling hills that sit at the foot of mountains. While there are many regions named Piedmont throughout the world, in the United States the name is most commonly applied to an area just east of the Appalachian range separating these mountains from the coastal plain and ultimately the Atlantic Ocean. We chose the name Piedmont as a reference to our position on the investment landscape. We envision an investment landscape that parallels that of the southeastern U.S. with the high peaks and low valleys of undiversified style portfolios representing the mountains and the overly diversified portfolios of closet indexers representing the coastal plain. In this investment landscape, the Piedmont represents the desirable middle ground of gently rolling hills of reasonable returns and softly shaded valleys of acceptable risks. It is neither too hot nor too cold. The terrain does not rise too high or fall too low. It is the region where most people choose to live because it offers the best of both worlds.

In the Piedmont portion of the investment landscape, risk-aware investment products are the norm. Most people naturally seek these products out, responding to the wisdom inherent in striking a reasonable balance between risk and return. There are, of course, exceptions to this rule. There are those who prefer to climb lofty peaks of valuation seeking the precious gem of ever-higher growth rates, those who are willing to endure rocky climbs and risk tumultuous falls in pursuit of these rare treasures. Mirroring these intrepid climbers, one traditionally finds the safety-seeking investors of the value camp who eschew lofty peaks and sweeping vistas, instead searching for gold in cold mountain streams found in the darkness of the valley floor. The most intrepid among these pursue riches hidden beneath the earth spelunking into the subterranean caverns of contrarianism, feeling at once sheltered by deeply discounted valuations but never fully protected against the risk of landslide or collapse. Finally, there are also the extremely risk-averse large scale planters of the coast whose hired hands plow deep into the sandy soils of the coastal plain and who make their living planting staple crops in long arrow straight rows that bend only as they approach the horizon. The pioneering ancestors of today’s landed gentry claimed these fertile grounds generations ago and their progeny do not welcome outsiders into their domain of privilege and ease. These less venturesome descendants of pioneering forbearers have learned to live with diminished yields resulting from over-farming the same blue chip stocks. They build their homes high above the ground on great mounds of consensus thinking so that the recurring floods of market volatility that periodically inundate their fields do not sweep away the proprietors as well.

In the pleasant middle ground that lies between these geographical extremes one finds the hard-working simple-living yeoman farmers and craftspeople of the Piedmont. The people of the Piedmont believe that nothing is promised to them but nothing is beyond their reach. The people of the Piedmont believe that they must make hay if they are to ride horses and must grind wheat in order to eat bread. The people of Piedmont Investment Advisors, LLC believe that in order to earn returns we must accept risks and invest time. The more of each input then the greater the final output. Our approach to making a living is based on principles of consistency of effort, transparency of process, and accountability for results. We know that it is our responsibility to do whatever it takes to get the job done. Piedmont’s brand of strategic core investing is a disciplined, but flexible approach to capturing the long term positive returns of the US equity asset class by taking an active, pro-cyclical approach to accepting market risk. We emphasize adding alpha through stock selection and seeking protection through portfolio diversification.

We perceive ourselves as a highly capable boutique manager with some of the best investment ideas and best investment management talent in the business. Our goal is to establish Piedmont Investment Advisors, LLC as one of the best mid-sized investment managers in the nation. No matter what opportunities or challenges the market puts before us we will remain focused on achieving this objective by working to consistently generate attractive returns for our clients. We have a wonderful home in the piedmont of North Carolina and are inspired by the state’s official motto, “Esse Quam Videri,” reflecting the belief that it is more important “to be rather than to seem.”

In closing, please know that we are working hard to help our clients profit and that we are, as always, “focused on your future.”

With best regards,

Isaac H. Green, CFA
President & CEO