Leading Australian equities investment manager, DNR Capital, has launched a new fund providing investors with exposure to high quality, longer-term opportunities in the smaller companies sector – the DNR Capital Australian Emerging Companies Fund.
Jamie Nicol, Chief Investment Officer DNR Capital says, “We are excited to offer our new product to the Australian market – a natural evolution of our proven investment philosophy to the smaller companies sector. Consistent with DNR Capital’s long-standing investment process, this Fund uses bottom-up stock selection focused on buying high quality emerging Australian companies at attractive valuations.”
This new addition is the fourth strategy in DNR Capital’s suite of high quality products, which have consistently outperformed their performance objectives since inception. The investment manager focuses on concentrated portfolios with high conviction ideas, with a strong culture of alignment and accountability given its employee ownership structure.
The Fund is managed and led by portfolio manager, Sam Twidale, who brings impressive international portfolio management experience to the team. “We believe having a global perspective is becoming an essential requirement for analysing Australian companies now and in the future. Sam’s international investment experience, paired with the firm’s 17 year focus on domestic equites provides this strategy with a significant advantage when identifying globally competitive emerging companies for inclusion in an active, high concentration portfolio of 20-45 stocks. The strategy will also benefit from leveraging the firms well established investment infrastructure” notes Nicol.
The strategy will be supported by Co Portfolio Manager Mark Sedawie, who brings 10 years domestic equity experience with DNR Capital. “Sam and Mark previously worked together in corporate valuations and are excited about bringing their passion for small cap investing to this new strategy” says Nicol.
Sam Twidale, Portfolio Manager DNR Capital, adds “Corporate Australia is increasingly globalizing, with technology making businesses more scalable internationally. The future for many Australian companies is tapping into these significantly larger offshore markets, which will only increase going forward. When purchased on attractive valuations, the long-term rewards can be significant for high quality businesses which execute this successfully. We believe this Fund will appeal to investors seeking long-term capital growth, by investing in a range of high quality local companies, many with a domestic and expanding international footprint.”
The rational for investing in emerging companies has never been clearer says Twidale.
Three reasons why investors should consider investing in Australian small cap companies are:
- Value can be added through active management – Emerging companies are less researched by the market, creating opportunities to exploit market inefficiencies through detailed bottom-up analysis.
- Potential for higher long-term capital growth – Provides exposure to some of the fastest growing and most innovative companies in the market.
- Identifying future winners early – Offers unique opportunities to identify high quality businesses early in their development.
Twidale notes “We are seeing a broad range of attractive investments across the smaller company sector, with the fund providing exposure to a number of niche opportunities and fast growing emerging trends. This includes the impact of increasing IT spend and the transition to cloud based computing. Quality domestic franchises expanding into larger global markets. Disruption in financials as new business models compete with established players, and the recovery in commodity investment from cyclically depressed levels.”
DNR Capital and the portfolio managers seeded the new strategy at the start of 2018 with a representative portfolio managed under the same investment guidelines as the new fund. This representative portfolio has generated strong outperformance since inception. Calendar YTD since inception to 31st August 2018, the portfolio is up 23.17%, outperforming the ASX S&P Small Ordinaries Accumulation Index by 16.97%.
For more information about the Fund please visit: https://dnrcapital.com.au/individual-investors/ec-investor-managed-fund/
About DNR Capital
Founded in 2001, DNR Capital is an Australian investment management company that delivers client-focused, quality, investment solutions to institutions, advisers and individual investors. DNR Capital is a signatory to the Principles for Responsible Investment (PRI).
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IMPORTANT NOTE: The information relating to DNR Capital has been prepared by DNR Capital Pty Ltd, AFS Representative – 294844 of DNR AFSL Pty Ltd ABN 39 118 946 400, AFSL 301658. Whilst DNR Capital has used its best endeavours to ensure the information within this document is accurate it cannot be relied upon in any way and you must make your own enquiries concerning the accuracy of the information within. The information in this document has been prepared for general purposes and does not take into account your particular investment objectives, financial situation or needs, nor does it constitute investment advice. Before making any financial investment decisions you should obtain legal and taxation advice appropriate to your particular needs. DNR Capital will not be responsible or liable to anyone who acts or relies upon anything contained in, or omitted from, this document. Past performance is not indicative of future performance.