Mary discovered the world of small-cap investing in her first job on Wall Street.

"I thought I'd like researching companies because, as a youngster, I enjoyed discovering new stocks with my father and tracking their performance. I also loved doing research in school," she recalls. "At first, everything seemed pretty much grounded in theory. Then I met the company that changed my life."

Mary went to see Russell Corp., an Alabama-based, family-run company that had manufactured textiles since the Civil War. Like many US apparel manufacturers, their business was slowly being eaten away by competitors who were producing goods offshore using cheaper labor.

Rather than stand still, Russell responded. They brought in a new management team who completely automated the manufacturing process and started a just-in-time inventory approach with their suppliers.

"In listening to Russell's management describe what they had done, and why, and its potential impact on the bottom line, I was intrigued," says Mary. "The painful years were ending, and the good times were about to begin. I think I was only the second or third analyst to visit them in as many years, so I got a lot of their time—they thought they had a good story to tell, and they wanted someone to listen."

While the early stages of the transformation were painful financially, Russell emerged as a reinvigorated company, sustaining several years of +15% profit growth. The company's stock performed admirably as well, as Russell became the dominant manufacturer of athletic apparel in the US.

"As I watched potential profits turn into actual ones and saw the stock respond accordingly, I realized that the Russell factory floor was where theory and reality came together and where my love affair with researching small companies began in earnest."

Mary's pursuit of small company research has transformed her into one of today's industry visionaries. In fact, she's been a regular guest on CNBC, and her investment approach has been widely covered by the leading trade magazines.

There's also been no shortage of accolades. In 1996 Barron's¹ named her Fund Manager of the Year and, in 1989, she earned a #1 ranking on Institutional Investor's² All American Research Team for her work in small and emerging growth sectors. (In 1987, she earned a #2 ranking, and in 1986 she was #3.)

Of course, honors like these come from two things: hard work and consistent results. And Mary has experienced more than her fair share of both.

Prior to founding AH Lisanti Capital Growth, she successfully built three investment management businesses. At ING Investments and its predecessors, Northstar and Pilgrim, she was the chief investment officer of domestic equity. Under her direction, the firm's assets grew from $100 million to several billion in under five years.

Before that, Mary's success was visited upon Strong Capital Management, where assets in her investment area grew from $10 million to $400 million in under two years. At Bankers Trust, she rebuilt the small- and mid-cap investment team and raised new assets by $300 million yearly—increasing overall assets under management from $500 million to $2.5 billion during her tenure. It's no surprise that during this time, Mary was ranked in the top decile of fund managers in her category.

Success has not softened her passion for small- and mid-cap stocks. In fact, she believes the current small-cap cycle could be very powerful—similar to the cycle experienced from 1975 to 1982. "It reminds me of when I first came into the business," she says. "Small caps are still under-researched. And long term, they're still where the action is."

Mary's secret to success is relatively simple. "I find the companies on the leading edge of change," she says. And to find those companies, she employs a wide range of skill sets. "Some of it's from my Princeton days, studying English literature. They taught me to analyze, apply psychology, and ask probing questions. Which I do to every small company I meet."

But perhaps even more telling of Mary Lisanti's approach is what she learned at age 10 when her father made tracking investments a game. "I'd spend hours typing the names and symbols of his investments on index cards and then monitoring their performance," she recalls with a smile. "That's when Dad taught me a very simple but profound lesson. Careful stock picking is key."

¹Fund managers were ranked by their respective fund category, by performance, and had to be managing their fund for at least two years. Additionally, volatility was factored in, with less volatile funds scoring higher than more volatile funds.

²Institutional Investor annually surveys the opinions of several thousand individuals at hundreds of financial institutions. Respondents were asked to score each analyst in each category and the score tally was weighted based on the size of the institution voting in addition to the place awarded.