Already a subscriber?After three years of keeping a low profile, Pendal’s small cap fund managers are ready to talk.
As it stands today, the team – analysts Damien Diamant, Rachel Folder and Callum Sinclair – oversee around $1.2 billion in Australian equities. About $900 million is invested in small caps with the rest allocated to the Pendal MicroCap Opportunities Fund, which is largely closed to new money. They point to a line chart that shows that over the 10 quarters since the duo took over the smaller companies fund, there has only been two quarters where its active performance has undershot the benchmark.
For example, like furniture seller Nick Scali, which soared more than 16 per cent after it exceeded first-half profit guidance, or clothing retailer Universal Stores, which jumped 11 per cent on its interim results. AUB now trades at $31 and according to the portfolio managers “has got a long way to go” thanks to chief executive Mike Emmet, who they say is “one of the highest quality CEOs in the small cap universe”.Other companies they like include data centre operator Macquarie Technology Group, IPD Group, and last year’s biggest initial public offering chemical distributor Redox.
As for the general health of the IPO market, both Edgley and Teodorowski say it “isn’t that great” despiteAnd while there are a few deals “waiting in the wings”, they say the market needs to see a more sustained improvement in sentiment towards the small-cap sector, which has “massively underperformed” larger companies.“None of them really want to be the ones to set the tone and open the window by taking a discount ,” Edgley says.
Source: Tech Daily Report (techdailyreport.net)
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