Maple-Brown Abbott has launched an Australian small companies fund following the appointment of Phillip Hudak and Matt Griffin to the boutique investment manager in April.
The Maple-Brown Abbott Australian Small Companies Fund is primarily invested in undervalued small companies where the investment team has conviction in medium-term earnings delivery and that are supported by sustainable business models. The fund typically holds 30–50 stocks which score well on combined earnings-based valuation and sustainability measures, with the focus on diversification and stock specific risk management. It aims to outperform the S&P/ASX Small Ordinaries (Total Return) Index, after fees, over a five-year period.
CEO and Managing Director Sophia Rahmani says the fund is based on the expertise, philosophy and investment approach of two experienced Australian small caps investors, who previously managed the AMP Capital Australian Emerging Companies strategy.
“Phillip and Matt have an impressive track record and a compelling earnings-based philosophy integrating a sustainability focus that we believe differentiates the strategy. They also have a proven and repeatable investment process, focused on in-depth fundamental research.
“Judging by the early market feedback, history of the team and capacity limits of small caps strategies, we expect this will be a popular offering for institutional and wholesale clients. The fund further diversifies Maple-Brown Abbott’s offering to investors, and we have seen early interest in a small caps strategy run as a boutique within Maple-Brown Abbott,” Ms Rahmani said.
Mr Hudak says he and Co-Portfolio Manager Matt Griffin have worked diligently with the support of the broader Maple-Brown Abbott team to launch the fund within a relatively short period.
“Matt and I are passionate about finding undervalued Australian small companies with idiosyncratic exposures, and we are excited to be able to do what we love in our new home at Maple-Brown Abbott.
“The new fund is based on our existing strategy and core philosophy that earnings drive share prices rather than on any particular investment style. We consider the valuation and where the company is in the earnings cycle. We believe this combined with our focus on sustainability and avoiding short-term downgrades can deliver consistent returns,” Mr Hudak said.
Mr Griffin added it was an exciting time to be launching an Australian small caps fund given the current opportunities.
“The recent market volatility has presented more attractive entry points for companies with strong medium-term earnings expectations and sustainable business models,” Mr Griffin said.
“As part of the team’s research, we focus on non-consensus and proprietary insights and expect to hold over 1,000 company-related meetings per year, including management meetings, site visits, industry expert panels and ESG meetings. The team is highly aligned to client goals through a competitive remuneration framework and each team member having invested into the strategy.”
In just over 12 months, Maple-Brown Abbott has broadened its offering from three investment strategies – broad-cap Australian value equities, Asia-Pacific equities and global listed infrastructure – to five with global emerging markets and now Australian small companies.
“Being a privately owned boutique investment manager with a long history of strong client alignment and quality investment capabilities means that when we identify solutions that align with our strategy and our clients’ interests, we can add them relatively quickly and efficiently. We believe the launch of our Australian Small Companies Fund is a good example of this,” Ms Rahmani added.