Today we at Turner Investment Partners celebrate our 20th anniversary as a firm. That’s a milestone that few firms have the good fortune to celebrate. According to a sobering statistic from the U.S. Census Bureau, less than 17% of all new businesses make it to a 20th anniversary.

I believe it’s not entirely inappropriate to state with some entrepreneurial pride that our firm has not only survived but achieved a measure of success in its 20 years of existence. Yes, we’ve had our share of ups and downs on the business roller coaster during that time, but on balance we’ve learned from our mistakes and gotten better as the years have passed.

Why have we, unlike most firms, been able to reach our 20th anniversary? When I reflect on that question, three concepts keep coming to mind as explanations:

In my mind, here’s how we’ve demonstrated those three concepts, imperfectly at times but satisfactorily most of the time.

Outperform. John Bogle, the founder of The Vanguard Group, is right when he insists over and over that it’s tough to outperform the stock market. We would hasten to add, it’s tough but not impossible. Most of our own primary institutional portfolios have been able to outperform and, equally as important, produce returns with some predictability over the years. Our growth portfolios, for instance, have been predictable in that they tend to do best in flat or rising markets.

Our first portfolio established in 1990, Turner Core Growth Equity, has beaten the Russell 1000 Growth Index by 1.56 percentage points annualized after fees from its inception to December 31, 2009, and has done best in flat or rising markets, as we and our clients have expected it to. Among our other growth portfolios that have similarly performed with distinction are Turner Midcap Growth Equity and Turner Small Cap GrowthPlus Equity. From their inceptions in 1996 through 2009, Midcap Growth Equity has outperformed the Russell Midcap Growth Index by 4.27 percentage points annualized after fees, and Small Cap GrowthPlus Equity has outpaced the Russell 2000 Growth Index by 3.20 percentage points annualized after fees.

As we see it, to generate that kind of outperformance over the years, an investment firm needs three things: the discipline to stick with a well-reasoned investment process, a skilled investment team that stays intact, and defined asset limits that close portfolios before they get too big and their potential for superior performance erodes.

After what we call the Terrible 2000s, the worst decade in history for stocks, we know only too well that it takes discipline to continue to adhere to your investment process when your investing styles -- and even stocks in general -- are out of favor. But we’ve seen how that discipline has paid off: when the market inevitably favors our own investing styles again, our performance has tended to shine. We think that discipline helps explain why our very first client is still a client today. And why 27 clients have been with us for more than 10 years. And why one-third of our clients have given us the privilege of managing more than one of their portfolios.

Moreover, to keep our Growth, Core/Value, and Quantitative Investment Teams intact, we’ve established a culture in which our portfolio managers (and other key employees) have a stake in the firm, and all of them are compensated on how well they perform on behalf of clients. Our nine senior portfolio managers have been with us an average of 14.6 years. And in January, 11 employees became the latest to be awarded equity ownership in our firm, bringing the ratio of principals to total employees to 74%. We believe our broad employee ownership and our pay-for-performance practices are the best ways to keep talented people and align their interests with those of our clients.

And to preserve the return potential of our portfolios, we initiated in 1998 a policy of closing our portfolios once their assets reach specific predetermined levels. We instituted that policy in the belief, confirmed by academic research, that investment performance can deteriorate when assets grow too large. We are proud to be regarded as something of a pioneer in that movement. At the time, the financial press published comments such as this about our asset limits and our willingness to close portfolios before they grow too big: "Turner Investment Partners strongly believes that when it comes to managing money, smaller is often better."

We update our asset limits every year. Currently three of our 19 primary institutional portfolios have reached their asset limits and are closed so that they remain small enough to do right by our existing clients.

Serve our clients well. We never lose sight of who we are working for: you, the client. Above all, we never lose sight that our clients are people, not some remote, anonymous abstractions. We realize that how well our investments perform has a direct bearing on the quality of the lives of real human beings -- people at all levels of clients’ organizations, from the foundation president to the sheet-metal worker, from the chief medical officer of a hospital to the administrative assistant in state government, from the college professor to the homeless person who’s the recipient of a charity’s compassionate generosity.

In addition, we have a Client Service Team that serves as advocates for you and that frees our Investment Teams to concentrate on performing their best for you. And we communicate our investment strategies and performance and viewpoints to you regularly through Sector Focus pieces, position papers, Perform newsletters, quarterly investment reports, a Web site, Web casts, and letters like this one. We try to communicate openly and candidly, telling you both the good and the bad. When one of our portfolios underperforms its benchmark in a quarter, we say it underperformed. Such candor is to our benefit: we believe the company that misleads others in public may eventually mislead itself in private.

Act ethically. To us, acting ethically means more than just staying out of hot water with the Securities and Exchange Commission. In essence, it means doing things to ensure the client always comes first.

For example, we all but prohibit our employees from buying or selling individual stocks. We believe strongly that if a stock is good enough for one of our portfolio managers, it’s an even better stock for our clients. So we invest in that stock for our clients . . . and put our own money in our mutual funds.

Also, we adhere to a policy prohibiting our investment professionals from accepting gifts from brokers and other vendors. We need to make investment decisions based solely on their merit, instead of on some broker dangling 50-yard-line tickets to a Philadelphia Eagles game in front of us.

In short, we believe that if a contemplated action on our part borders on a gray area, it isn’t a gray area at all; it’s simply wrong. I like how Warren Buffett, when he temporarily became chief executive officer of a scandal-tainted Salomon Brothers in 1991, used this tennis metaphor in explaining to the firm’s employees what the expected code of conduct would be: "Anything not only on the line, but near the line, will be called out." We’ve sought to call anything near the line out long before the SEC turned up the heat in response to some recent investment-industry black eyes involving Ponzi schemes, insider trading, and the like. We began to call anything near the line out 20 years ago and have continued to do so ever since.

In this business, trust and confidence are all-important, so it would be foolish to jeopardize the trust and confidence we may have earned since our founding by failing to act ethically. And as a matter of simple pragmatism, we’ve worked too hard and experienced too much to consider behaving otherwise. When our firm was a fragile start-up in a tiny office in Berwyn and it wasn’t altogether clear that we would be in business next month let alone the next 19 years, some of us cashed in our Individual Retirement Accounts to help us make ends meet. We’ve weathered two of the worst bear markets in modern times. We’ve seen our assets under management drop because of market declines and strived mightily to rebuild those assets each time the market rebounded. We’ve lost clients. We’ve regrettably had to let some employees go when the global financial crisis was at its worst in the fourth quarter of 2008. But for every challenge and setback we’ve encountered, our accomplishments and joys have been exponentially greater.

Personally, I’ve never been more enthused about our firm and our ability to deliver for you going forward. I believe my 127 colleagues at our firm are also enthused and committed to continue doing their best for you. I believe the 33 members of our Investment Teams are more skilled and experienced than ever. I believe we have the portfolios and the distribution structure in place to meet the diverse needs and risk tolerances of any client. (Our quantitative and long/short portfolios, for instance, are designed for clients who prefer volatility less than that of other stock portfolios.) I believe the stock market will continue ascending, as it generally has throughout history. And I believe globalization will be a force for economic good and a source of great investing opportunities worldwide.

Together, our eyes are squarely on the future, but we’ve not lost sight of the lessons of the past. Be assured we’ve not lost sight of who has been most instrumental to our firm attaining its 20th anniversary -- you, of course. We are acutely aware that if our firm is to continue doing business for 20 more years, we need to keep putting you first. Indeed, our trademarked motto, Putting our clients first, remains just as relevant today as it did when we first coined it.

Here’s an ambitious goal for our next 20 years: to never lose a client. That may be impossible even if our future performance were absolutely stupendous because some clients, for instance, get acquired or merge and thus are no longer in a position to use our services. Even so, with the prospect of a better stock market, along with a continued focus on generating outperformance, serving our clients well, acting ethically, and last but not least, Putting our clients first, why shouldn’t we take such a goal seriously? Why not aim high? As the advertising legend Leo Burnett observed, "When you reach for the stars, you may not quite get one, but you won’t come up with a handful of mud, either."

In retrospect, we are grateful beyond words for your support and our relationship, whether that support and relationship have been one year or 20 years in duration. And we hope the next 20 years will be awash with many stars and little mud for both you and us.

Past performance is not a guarantee of future results.

The views expressed represent the opinions of Turner Investment Partners and are not intended as a forecast, a guarantee of future results, investment recommendations, or an offer to buy or sell any securities.

Turner Investment Partners, founded in 1990 and based in Berwyn, Pennsylvania, is an investment firm with more than $17 billion in assets under management in stocks, as of December 31, 2009. Turner manages growth, international, core, value, quantitative, and alternative separately managed accounts and mutual funds for institutions and individuals.

As of December 31, 2009, the Turner Core Growth Equity composite returned after fees 38.3%, -4.5%, 1.6%, -2.0%, 7.9%, and 9.3% for the one-year, three-year, five-year, 10-year, 15-year, and since-inception periods, respectively. The Russell 1000 Growth Index returned 37.2%, -1.9%, 1.6%, -4.0%, 6.9%, and 7.8% for the one-year, three-year, five-year, 10-year, 15-year, and since-inception periods, respectively.

As of December 31, 2009, the Turner Midcap Growth Equity composite returned after fees 48.6%, -1.6%, 2.7%, -1.6%, and 11.0% for the one-year, three-year, five-year, 10-year, and since-inception periods, respectively. The Russell Midcap Growth Index returned 46.3%, -3.2%, 2.4%, -0.5%, and 6.7% for the one-year, three-year, five-year, 10-year, and since-inception periods, respectively.

As of December 31, 2009, the Turner Small Cap GrowthPlus Equity composite returned after fees 36.7%, -3.1%, 1.9%, -0.9%, and 6.3% for the one-year, three-year, five-year, 10-year, and since-inception periods, respectively. The Russell 2000 Growth Index returned 34.5%, -4.0%, 0.9%, -1.4%, and 3.1% for the one-year, three-year, five-year, 10-year, and since-inception periods, respectively.

All returns are calculated and expressed in U.S. dollars and reflect the reinvestment of dividends and other earnings.

The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell Midcap Growth Index measures the performance of the mid-cap growth segment of the U.S. equity universe. It includes those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values.