Amy Zhang Call Transcript

Amy Zhang Call Transcript


Portfolio Insights: Mid Cap Focus and Small Cap Focus Strategies

Amy Zhang, CFA Executive Vice President Portfolio Manager

Amy Zhang recently provided an update on the Alger Mid Cap Focus and Small Cap Focus strategies. The conference call was hosted by Matthew Goldberg.

I’m also particularly impressed by Amy’s journey from China to the U.S. Amy was the only recipient from Shanghai, among thousands of applicants, chosen to receive the Armand Hammer Scholarship which led her to the U.S to attend an international boarding school. You can learn more about her background on our website, which is, and we have a tab on the website, the insights tab, and a section called Profiles for Success where there’s some additional insights and background on Amy. Amy, I know innovation is something we talk a lot about here at Alger and the impact innovation can have on the economy is something you’re keenly aware of. And on top of that, what a year it’s been for change. So, to kick off our conversation, has COVID and the resulting shift to work from home for so many people accelerated certain investment themes? Can you talk about how companies and industries are transforming? Amy Zhang: Thank you, Matt, for the kind introduction and good morning everyone. Thank you for being on the call. As many of you know, I’ve managed small and mid cap growth strategies for about 18 years and innovation has always been very thematic to my investment process and that’s a time-tested process that has worked through the good times and the bad times. We like to identify companies that can be powered by secular trends that will be sustainable for three to five years and beyond, and I always use the analogy of a motorboat versus a sailboat. A motorboat is powered by the engine of innovation. So then over the long term that may lead to value creation.

Please note, this transcript is from a call on September 15, 2020, and is edited for clarity and brevity.

Matt Goldberg: Welcome to today’s call featuring Amy Zhang, portfolio manager of both the Alger Small Cap Focus and the Alger Mid Cap Focus strategies. Amy also co-manages the Alger Small Cap Growth strategy with our CEO and CIO, Dan Chung. I’m excited to have Amy here with us this morning to share her thoughts on the small and mid cap stocks in the strategies that she manages. Amy joined Alger in February of 2015 and has 25 years of investment experience. Prior to joining Alger, Amy was at Brown Capital Management as a partner, managing director, and senior PM on the Brown Capital small companies strategy, and Amy has a very diverse investment background, including working at Citicorp Securities building credit derivatives. Amy’s background also offers a unique perspective in that she attended Columbia Business School and started her buy side career at Franklin Templeton, a value shop. And I mention this because it’s a unique perspective that Amy now brings to managing growth equities.


Amy Zhang (continued): COVID and work from home have accelerated certain investment themes, especially digital transformation. We’ve invested in digital transformation for over 10 years. Even, say, 15 years ago, I was talking about the kind of companies we invest in that are about turning data into actionable information and automation. And that really transcends every industry. So the first one, digital transformation, is about work from anywhere that has unquestionably been accelerated by the pandemic. But I also think a hybrid work environment is going to continue in the new normal. And so, we think that’s a very sustainable investment theme. That really transcends into other areas. People think about SaaS and technology but, as you know, digitization transcends other industries. It could be a restaurant, in terms of digital strategy, and also a telehealth company using a digital strategy for better clinical outcomes in health care. There are numerous examples of that. And then there is e-commerce and cloud computing and cybersecurity. Those are represented in our portfolio and then you will also notice, as I mentioned, that health care, including diagnostic companies, is a very, very important area – especially for people who have to manage certain diseases or pre-existing conditions like diabetes. For such diseases, it’s very important to monitor data and turning that data into real-time intelligence. That is really lifesaving. We have invested in diabetes companies, including makers of insulin pumps, for a very long time. And it’s also about early detection. They need to be aware of the problem. I think, unfortunately with COVID, we all feel that we need to take better care of ourselves – nothing’s more important than our health. So, the adoption of medical devices for the companies we invest in is also a theme. We can see a theme in them in terms of digital transformation. Innovation really transcends a lot of different sectors.

portfolio at all? Do you own positions directly tied to a potential vaccine?

Amy Zhang: At a portfolio level, we have taken a barbell approach. We have companies that provide office solutions and other companies that provide health care solutions, whether it’s testing or digital strategies or technology allowing working from anywhere during the COVID crisis. But also, we have companies that would do well because, clearly, we are recovering and moving toward normalizing, hopefully sooner rather than later. As you know, I worry about low probability/high impact events and I don’t like high binary events. We wouldn’t want to invest in companies that live and die by an FDA decision that can drive a stock price up and down 50%. However, I have always thought about what we can have exposure to in important sectors. Biotech is a very important sector, so we have several companies with exposure to that. I will just highlight one, which is our largest holding now in Small Caps Focus, which is Cryoport. I have invested in it since May 2018, so it’s been a while and you can see the tremendous growth of the company. They’re the leading global provider of very critical logistics and cloud-based software for temperature-sensitive materials for the life-science industry. I almost think about them as the UPS and FedEx in the life science industry in a very simple way. It’s a niche market that they have become more dominant in and especially in the COVID period now, there are so many therapeutics and vaccines in the works. They help clinical trials and they are exposed to eight therapeutics and vaccines. That’s very significant. We think that’s part of the reason the stock has done well. And they also made two transformative acquisitions. So, I always think about how we can play the sector but in a prudent way. It’s not just about growth. When I think about sectors and subsectors, there are so many life sciences companies that have so much pent- up demand and they’re going to do well once this pandemic is normalized and we’re are already seeing that now. And then also there’s the recovery trade in other ways.

Matt Goldberg: So, Amy, just to piggyback maybe on the health care sector or that example, in anticipation of a vaccine. Are you changing the positioning of the

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Amy Zhang (continued): For example, many of you know about Wingstop and its digital strategy. did very well during the last Super Bowl and they could do as well again during the next Super Bowl. We also have companies like Shake Shack, which is more pronounced as a recovery trade. This is a relatively new position that we added this year when I believed the stock was very depressed and significantly undervalued because they’re exposed to tourism. They are about New York and New York making a comeback. But New York is strong. It will come back. So, I have a barbell approach. The key to the portfolio is diversification and being exposed to different end markets and customers with companies that would do well in all kinds of markets. Matt Goldberg : So, it really is a barbell approach that you are taking as we work our way toward a COVID vaccine. On another topic, the November election is quickly approaching. Because we’re coming up on the election, is your portfolio more immune to the election outcome? Is there anything you’re doing differently as we head into election season? Amy Zhang: We are not a macro strategy, but we are certainly cognizant of macro items. We spend most of our time focusing on identifying exceptional growth companies that really would potentially do well in any kind of political environment. Many of you probably have read our strategist Brad Neuman’s work. He talks about if we knew the outcome of the presidential election four years ago and invested accordingly, somebody would actually lose money based on that. For example, investing in the kind of companies that will benefit from an administration policy like deregulation – let’s say financial and also energy, but you see banks or energy have not done well. So instead, his study shows that we believe that the most innovative companies have done fairly well. Not to say that we will be immune, but we believe innovation will trump politics. What we can do is spend a lot of time understanding our positions’ risk/return profiles and use any market volatility to our advantage, so that we come out stronger. Volatility will be affecting

everyone, but we have historically come out stronger in a very volatile environment, including Q4, 2016. That really prepared us exceedingly well for 2017 and 2018, even though Small Cap Focus underperformed in Q4 of 2016. I think anybody would trade a quarter for a long- term success. Because we are thematic, we are very cognizant of not missing anything. Matt Goldberg: Thanks, Amy. Let me share a question from one of our listeners. Performance has been very strong this year for Small Cap Focus and Mid Cap Focus through the end of August and your MPT statistics are also compelling. Can you elaborate on the parts of your process that you believe contribute to the strong metrics and the performance? Amy Zhang: High-financial quality is really paramount to our strategy so we spend a lot of time looking at strong balance sheets and looking for companies with strong moats that can make the companies stronger. That’s why, if there’s one silver lining of COVID is that it crash-tested our portfolios. If you don’t have the high- financial cushion, a strong-financial cushion, then as a weak company you would just become a victim in high- stress periods, like COVID, and or other periods of financial distress or in a recession. So that’s first and foremost, but it’s also, as I mentioned before, the importance of the replication of the end market of some of the top companies. But it’s very important to have diversification and not to have the same exposure. So, looking at subsectors is very important. Sector weighting could be a little misleading because, for example, we talk about innovation. It’s very important that we dig very deep into

each subsector and you can see they all have idiosyncratic drivers and that’s very important.

So, at any given time, my goal is that some stocks will work. So, you will see, when you look at our top contributors every year, usually it’s different and when I’m thinking about building a portfolio, it’s very deliberate on my part. The timing is very uncertain. That’s why it’s very important to take a long-term view. This needs to be a three- to five-year investment program.

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Amy Zhang (continued): Again, innovation is a very, very important theme but that’s evolved and the changes are constant. And you know at Alger we invest in Positive Dynamic Change. But the most important thing is to understand the change. We always want to be on the right side of the change. It’s really about change and the sustainable growth generated by that change. We always want to be earlier than everyone else. Like Cryoport. That time I think we were the first in terms of companies. We were very, very small, very early in their corporate life cycle as an institutional shareholder. So, to that extent, this really comes down to understanding themes but also really focusing on our individual stock selection. So, our companies will have common themes, such as innovation, that can trump economic cycles. Matt Goldberg: Clearly, the value of fundamental bottom up research is the cornerstone of the process. So, Amy, here’s a question sent by email: How do you define small and mid caps and what are the differences across the sector weightings? Amy Zhang: I define small in terms of revenue because I think revenue is a better indication of size. For Small Cap Focus at initial point of investment we look for companies with revenues that are generally less than $500 million. A lot of times a lot less, perhaps $100 million to $200 million or even less. Cryoport, for example, is much less than $100 million. But we don’t invest in startups. All companies we invest in have proven operating histories. Mid Cap Focus is over $500 million in revenue. I keep it nebulous because mid cap is really interesting in terms of it having the best of both worlds for small and large. Everybody understands that the small cap market is very inefficient and there is a lot of alpha to be made. But mid caps, in terms of quality, are closer to large cap. In terms of growth potential, they’re similar to small. I think we are pretty good at picking high-quality names and when you look at a small cap benchmark—not that I look at it closely—there are a lot of low-quality names. Mid cap is different. To that extent, we have a more open-ended approach with mid cap. The two strategies

really complement each other. Somebody asked, “How is it different?” It’s very different in the sense that of course the strategies have common themes. But in small cap, it’s very hard to find high-quality consumer names. But mid cap is a totally different story. We don’t want to sacrifice quality, and so in small cap, health care is over 40%, tech is about 35%, over 35%. So together that’s over 70%. In mid cap, our largest sector is consumer discretionary. It’s over 30% and that has worked out very well. It’s a significant overweight. There are a lot of consumer trends, including e- commerce, sports betting, other ones that really are very promising areas that you can invest in mid cap that are not available in small cap. Mid cap tech, especially large mid, is more overvalued and tech is about 25%. It’s actually underweight. People tend to be surprised about that. But again, it’s about risk/reward. And then health care is 20%. In tech, everybody wants to be early and being right is very important, and in health care that’s also very true. Relatively, more names in mid cap are commonly known. But we still find alpha generating opportunities, of course. But I just want you to know that it’s very deliberate, how I designed those two portfolios. And you can see they almost hedge each other. And we have seven common holdings out of 50, so that’s 14%, which is very small, and then also it’s deliberate. When I first launched the mid cap product it was over 60%, which is also understandable because basically I want to own what I know. But over time, my goal is really about best ideas and diversification through the strategies and I’m very grateful that we have many of our small cap investors that invest in our Mid Cap Focus product.

I really feel our Mid Cap Focus strategy is a natural extension of the success that we’ve built in Small Cap Focus but in a much bigger arena.

Matt Goldberg: Thank you, Amy. At this point, why don’t we open the call to questions.

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Speaker Question: I want to thank you for everything you’re doing. You’re amazing but I was curious, do you own Teladoc?

holdings like Shopify. You could see its double digits, multiple. So that’s the goal of Small Cap Focus.

In mid, this year, I changed the portfolio a lot. Mid is more fluid. When you get bigger market caps, there is more technical consideration. The key is about risk/reward. So, risk/reward plays a much bigger role, like the valuations. I care about valuation greatly, but to use a mechanical number like P/E for small cap is totally useless. There’s so much intellectual property, intangible assets, especially in small with so much growth that isn’t priced. So, to that extent, if something is more fully valued, I will probably sell it for better ideas. And the quest for the best ideas is more active in my experience in mid because there are just more higher quality companies. In small, because we’re so selective and we’re very confident in our selection criteria we’re willing to see it through, like a bump in the road. Because small companies, most of them, start with one product and one service and they’ve got to spend a lot on an idea. A lot of them don’t even have a direct sales force. All that growing pain is worth it if you see a bright future with a stock going up 20, 30 or even 50%. Speaker Question: Given the increase in AUM specifically in Small Cap Focus, does that present challenges in finding companies under $500 million in revenue where they can be substantial positions or do the positions start much smaller and give you an opportunity to build it up over time? Amy Zhang: In the past, people asked me about capacity and it’s really simple. Based on the number of holdings and average market capitalizations, you may end up holding 10% of a company, which isn’t outrageous because our limits on how much we can own of a company is 20%. We’re soft closed in the sense that we’re very selective in terms of inflows. We take very little inflow and everything is considered at a monthly AUM meeting with our COO and our chief distribution officer.

Amy Zhang: I think we’ve invested in Teladoc since the inception of Mid Cap Focus. I’ve known Teladoc for a long time and we used to own it when it first went public in Small Cap Focus. There were some issues with the company, but I do think telemedicine is a very important secular trend for Teladoc, and we think its acquisition of Livongo is going to make them even stronger. The stock has been weak lately, but we believe the acquisition is a very, very strategic decision. I think it’s very attractive because there’s a lot of revenue synergy and a lot of cost synergy as well. Livongo itself is also a very exceptional company–they excel in disease management, especially diabetes. It’s extremely important to manage diabetes in a COVID pandemic and as you know, we invest in companies that are saving lives. So Teladoc really stands out. And we do think it’s not a reversible trend in terms of in the health care system because health care is so expensive, and everybody wants to reduce costs. Doctors as well. A lot of doctors don’t really want to see patients in person.

Speaker Question: How do you crystallize your sell process?

Amy Zhang: Fundamentally the sell is about deterioration. So, to that extent, it’s when fundamentals deteriorate; that’s most applicable to small. And with small and mid we spend a lot of time differentiating bumps in the road versus permanent impairment of fundamentals. Our job in small, in terms of valuation, is really more art than science as we cover all the conventional grounds. We do very, very detailed modeling. There are rigorous stress tests.

But a lot of it is about seeing the future. For small, we try to only invest in companies that might double. But a lot of times, it’s more than double. We see many long-term

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Amy Zhang (continued): When you look at our three- or five-year performance, how the strategy has grown, it’s more about price appreciation than inflows.

But then I trimmed quite a bit. I just thought it was expensive. That’s why coming into this year, the health care weighting was much higher. But then tech did better, so then tech grew, but even as tech grew, tech was 35% versus 44%. So that’s Small Cap Focus. For Mid Cap Focus, I changed the portfolio quite a bit. I took a lot of profits in tech so that’s why you see tech as even lower now. There could be periods of time like this with volatility that I think we are weathering quite well, but even if I knew that’s going to happen, like if there is going to be a junk rally, I’m not going to abandon my hidden gems for junk companies just for one quarter of performance. I always believe success for investments is made in years, not quarters. But on the other hand, having said that, I hope you all know that I definitely care about performance, whether it’s short term or long term. It’s very important for me. I run these as absolute return strategies over the very long term, three to five-plus years, even though we’re judged by relative performance. I also invest a lot of my own money in the Small Cap Focus, Mid Cap Focus and Small Cap Growth strategies. Speaker Question: Could you give a couple of examples as to how your credit background helped out from a defensive mindset in the first quarter as well as from an offensive position in terms of when to turn on the switch as far as buying opportunities and when you felt like the market was overreacting. Also, how do you view your portfolios’ cash positioning? Amy Zhang: Cash is always less than five percent, especially in Small Cap Focus, and Mid Cap Focus is also a little fluid because we have been growing rapidly. I mean, we grew from $10 million to now almost $300 million. In February, I took some profits, especially in tech. I always care about risk. If you lose 50%, you’ve got to make 100% to make up for that, so not that we always have that kind of drastic thing but that’s just an extreme example.

There are no challenges in terms of putting money to work because I’m so used to managing the size, but even when we’re super small, no matter what, I always take a prudent approach in terms of building a position. Initially, I usually always thought like 50 basis points, unless something is extremely, extremely cheap. Usually, that’s rare because what we’re trying to do is look at things that are reasonably valued but with fundamentals that are exceedingly strong. And conditions will change, and we always want to leave some dry powder to buy when there are more choices. I really feel like we have a lot of room, but again, performance is the most important thing so that’s what I’m focused on. But I’m not worried and we’re not deterred in any way by capacity at this point. Speaker Question: During the third quarter, when technology fell on a soft spot and was underperforming the market, did you take any particular action and what were your thoughts on if tech and health care would struggle compared to the broader market? Amy Zhang: It usually happens in the third quarter every year because people just sell winners. There’s always a rotation but I actually always felt tech was sort of expensive. That’s why it’s deliberate, like in a sense that health care is our larger sector for Small Cap Focus from the end of last year. I know tech reached new highs but even last year I felt some of the names were not cheap anymore, so it’s more my deliberate attempt. Like the year before, 2018, almost everything did well in our portfolio. And for us health care carried most of the load, and tech a little bit. So, I trimmed a lot of health care and put a lot into tech, as I thought tech was really cheap. And you could see last year was the year of tech, clearly, so that worked out very well. We have many names in Small Cap Focus that went up. I think we owned the five best-performing small cap tech names at one point. They were all up 100%.

Conference Call 6/9


Amy Zhang (continued): So also, I think given my credit background I care a lot about financial quality. So, it’s good that I didn’t have to make many changes. I looked at our portfolio, I saw that it was recession resilient – I mean, we went through a mini recession. We just didn’t know it was going to be caused by COVID. But I think we’ve been preparing for a recession for a long time, and I always want our companies to be recession resilient. High-financial quality is so important, so I felt good about that when examining the portfolio. Then I started to analyze “what if this got worse?” I would definitely need cash because the market is forward-looking, and you saw what happened in the rest of the world with COVID. It was terrible. I’ve been a health care investor for so many years, and I could see COVID was going to be more of a public health care crisis than most people thought, because most people were more optimistic back then. So, I think the dry powder, or cash, was already between 5% and 10%. For mid cap, we have more cash coming in so it’s around 10 – at times it was 10-plus. So, it was deliberate because I knew there would be opportunities and then we were able to buy more on weakness. Like Datadog, for example. I watched the company’s IPO. Its stock went up a lot and then it went down. Shake Shack was another example. Shake Shack did a secondary offering. I thought that was very interesting. So that was also in April. So, a lot of things happened like that in terms of taking advantage of market volatility and you’ve got to have cash to do that. That is when technical considerations are important. But stock selection is important, just over the long term, because if the portfolio was not a high-quality portfolio, we still wouldn’t be able to weather the storm that well. The key, especially in Small Cap Focus, is that it is really important to select the right companies because it’s really about having those companies that can go up to, say, four or five times but in a times of crisis also go

down a lot less than other companies.

But I’m proud to say, other than overall performance, I think the thing that I care most about and I’m most proud of is our upside and downside capture. Our upside is about 120 and downside is about 69 for Small Cap Focus. And Mid Cap Focus is similar, about the same for one year. I think that speaks to our process. Matt Goldberg: Amy, it is interesting how your experience at Citicorp gave you some perspective on the importance of a downside and thanks for sharing how that’s always on your radar. Speaker Question: Palantir and Snowflake are both going public. They are both very large companies. It appears to me the valuations are very high. Can you comment? And then can you comment on BigCommerce potentially being the next Shopify? Amy Zhang: We’re looking at both IPOs. Snowflake could potentially be interesting, but it’s priced to perfection at this point, and we don’t chase IPOs, with the exception of Avalara. That was one exception because I knew Avalara at that time was very reasonably priced. But those are very important companies. We invest in data and in the cloud. It’s very important for us to have a holistic approach. So, we listen to their presentations and it’s on our radar. We looked at BigCommerce and we thought the jury was still out. It’s very different from Shopify. Shopify has marquee customers, even from its beginning, and it has direct exposure to revenues based on gross merchandise volume, so the potential growth trajectory of BigCommerce is different. In terms of Shopify, it’s been phenomenal and I have invested in Shopify since late 2016. But BigCommerce is on our radar. It’s a very interesting company. We follow it very diligently, even just for better understanding Shopify. Do they have potential? Maybe. I know they signed Instagram, which is great, but the business model is not the same as Shopify. So that’s why you don’t see explosive growth.

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Speaker Question: I want to thank you for myself and my clients. My question comes from the relationship between Mid Cap Focus and the Small Cap Focus. Do you have criteria like revenue growth, where you would sell a small cap name and buy it in Mid Cap Focus? Amy Zhang: No, not necessarily but there’ll be companies that graduate to the Mid Cap Focus Fund. It’s really about a lot of different considerations like, for example, DexCom. We used to hold that in Small Cap Focus. Now, it’s in Mid Cap Focus. But DexCom growth has not slowed down. It’s still a high-growth company, but it’s just much bigger.

Matt Goldberg: Amy, thank you for your time today and for sharing your insights with us.

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MPT, or modern portfolio theory, involves attempting to construct portfolios to maximize expected return based on a given level of risk. MPT statistics can include upside capture ratio, which is defined as the measurement of a portfolio’s performance in up markets relative to a benchmark, and downside capture ratio is the measurement of a portfolio’s performance in down markets relative to a benchmark. Alpha measures the difference between a portfolio’s actual returns and its expected performance, given its level of risk (as measured by beta). Beta measures a portfolio’s sensitivity to market movements relative to a particular index; a portfolio with a beta of 1.00 would be expected to have returns equal to the index. P/E, or price-to-earnings ratio, is the ratio of a stock’s price to the portion of a company’s earnings or profit allocated to each share. The views expressed are the views of Fred Alger Management, LLC (“FAM”) and its affiliates as of September 2020. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by FAM. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Risk Disclosures: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. A significant portion of assets will be invested in technology and healthcare companies, which may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies. Investing in companies of small and medium capitalizations involve the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. Assets may be focused in a small number of holdings, making them susceptible to risks associated with a single economic, political or regulatory event than a more diversified portfolio. Foreign securities and Emerging Markets involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. Please visit for additional risk disclosures. Past performance is not indicative of future performance. The following positions represented the noted percentages of Small Cap Focus assets as of 6/30/20: Cryoport, Inc., 2.13%; Wingstop Inc., 3.29%; Shake Shack Inc., 1.75%; Teladoc Health Inc., 1.51%; Livongo Health, Inc., no position; Veeva Systems, 3.36%; Canada Goose Holdings Inc., no position; Shopify Inc., 1.36; Datadog, Inc., 2.31%; Avalara, Inc., 2.52%; Snowflake, private; Palantir Technologies, private; Nestlé S.A., no position; FedEx, no position; United Parcel Service, no position; and DexCom, Inc., no position. The following positions represented the noted percentages of Mid Cap Focus assets as of 6/30/20: Cryoport, Inc., no position; Wingstop Inc., no position; Shake Shack Inc., no position; Teladoc Health Inc., 1.57%; Livongo Health, Inc., no position; Veeva Systems, 1.70%; Canada Goose Holdings Inc., no position; Shopify Inc., 1.83%; Datadog, Inc., no position; Avalara, Inc., no position; Snowflake, private; Palantir Technologies, private; Nestlé S.A., no position; FedEx, no position; United Parcel Service, no position; and DexCom, Inc., 1.79%.

Important Information for US Investors: Before investing, carefully consider the Fund’s investment objective, risks, charges, and expenses. For a prospectus and summary prospectus containing this and other information or for the Fund’s most recent month-end performance data, visit, call (800) 992-3863 or consult your financial advisor. Read the prospectus and summary prospectus carefully before investing. Distributor: Fred Alger & Company, LLC. Member NYSE Euronext, SIPC. NOT FDIC INSURED. NOT BANK GUARANTEED. MAY LOSE VALUE. Important Information for UK and EU Investors: This material is directed at investment professionals and qualified investors (as defined by MiFID/FCA regulations). It is for information purposes only and has been prepared and is made available for the benefit investors. This material does not constitute an offer or solicitation to any person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. The original recipient is solely responsible for any actions in further distributing this material and should be satisfied in doing so that there is no breach of local legislation or regulation Certain products may be subject to restrictions with regard to certain persons or in certain countries under national regulations applicable to such persons or countries. Alger Management, Ltd. (company house number 8634056, domiciled at 78 Brook Street, London W1K 5EF, UK) is authorised and regulated by the Financial Conduct Authority, for the distribution of regulated financial products and services. FAM and/or Weatherbie Capital, LLC, U.S. registered investment advisors, serve as sub-portfolio manager to financial products distributed by Alger Management, Ltd. Alger Group Holdings, LLC (parent company of FAM) and Fred Alger & Company, LLC are not an authorized persons for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (“FSMA”) and this material has not been approved by an authorized person for the purposes of Section 21(2)(b) of the FSMA.

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AZCCT 9 2020

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