Canopy Investors, one of the partner boutiques of the Australia headquartered BFM Group, has launched a fund targeting small and mid cap equities and co-manged by former Magellan managers Kris Webster and Michael Poulsen.
The Canopy Global Small & Mid Cap Fund invests in companies across a range of sectors and regions. With a portfolio of 20-40 stocks, it aims for a return, after fees, exceeding the S&P Developed markets MidSmallCap (AUD) Net Total Return in $A over a market cycle of five to seven years. Small and mid-cap companies are defined as those having market capitalisations of no more than US$70 billion.
Webster has more than 21 years of experience in global listed equities, including 14 years at Magellan, where he tmost recently was head of its small and mid-cap team, chairman of Magellan’s Investment Committee, and head of Global Investments.
Poulsen has more than 11 years of experience in global listed equities, most recently as co-portfolio manager of Magellan’s High Conviction Fund and its small and mid-cap team.
The BFM Group operates as BennBridge in the UK and US, and Bennelong Funds Management in Australia.
Bennelong CEO John Burke says the partnership with Canopy will bring benefits to Australian investors.
“We believe there are great opportunities in the small to mid-cap market in the current environment. The fund offers diversification away from an increasingly concentrated global large-cap index. This is an opportune time to launch a partnership with a specialist and experienced team of investment managers.”
Webster says that while Australian investors have dozens of options to access large-cap global listed equities, there are far fewer opportunities to invest in a portfolio of high-quality smaller global companies.
“By allocating to small and mid-cap companies, investors benefit from a broader range of opportunities and greater diversification. The global index is increasingly concentrated in the largest companies – the largest 200 companies represent about two-thirds of the most commonly referenced global index – and most global equities strategies are naturally focused on these stocks. We think such a focus ignores incredible opportunities among the thousands of smaller global listed companies, many of which are very high-quality businesses and have strong and aligned management.”
“Smaller companies also offer the potential for strong returns, as seen historically. These companies typically have longer growth runways than larger companies, and mispricing is more likely to occur and persist, given that they often attract less investor focus than their larger counterparts.”
Poulsen added:“The fund will only invest in high-quality companies with demonstrable competitive advantages, aligned management, strong financial results, and favourable ESG characteristics. Quality companies have been shown to outperform over time, and this is especially true among smaller companies.”
“We are long-term investors, and conduct in-depth fundamental research to uncover high-conviction investment ideas. Our team is highly collaborative, having worked directly together for many years. We have implemented the latest software and systems, coupled with our proprietary data and processes, to build a balanced best ideas portfolio.”
“We view our investors as partners. We invest our personal wealth into our funds, ensuring our goals are constantly aligned. And we are thrilled to be able to partner with Bennelong.”
This article first appeared on IA’s sister title Investment International.
