Paradice Investment Management has launched its first fund for Australian retail investors, the Paradice Global Small Mid Cap Fund.
Paradice has operated the underlying strategy since August 2010 in the institutional market where, as at 28 February 2013, it has posted 4.36% above its benchmark of 7.20% since inception.
Initially the fund will be offered exclusively through Westpac’s advice and IFA channels and will be available through the BT and Asgard Wrap platforms. Equity Trustees Limited (EQT) has been appointed to act as responsible entity of the fund. The fund has also already received a “Recommended” rating from a recent Lonsec review.
“Over the years we’ve been asked by retail investors to have products in the market to give them access to the performance we’ve delivered institutionally for the last 13 years,” said David Paradice, managing director and founder of Paradice Investment Management.
“For a small firm likes ours whose focus is investment performance, we can’t afford to be everything to everyone nor introduce any distraction away from performance.
“Being approached by BT Financial Group, the wealth business of Westpac, to put a retail version of our global product together for its financial planning and platform businesses allows us to be targeted and institutional like in our approach without compromising our performance focus.
“In addition, having the support and expertise of an external responsible entity, through EQT, makes our first foray into retail much easier,” said Mr Paradice.
Piers Bolger, head of research & strategy at BT Financial Group, said the business had sought to identify high quality global small cap investment manages in the retail space but found it lacking.
“Via our networks across the investment industry we were introduced to Paradice, who at that stage was focused only on the institutional market place.
“Through our due diligence process we have realised that Paradice not only has a high quality investment offer that is aligned to our market views, but one that is different to other strategies in the market place, which makes it even more appealing,” Mr Bolger said.
The fund is managed by a dedicated team of three portfolio managers, based in Denver in the US, headed by Kevin Beck who has over 15 years investment experience.
“We are big believers that a small team of key decision makers whose sole focus is to go anywhere to find value in the small end of the market is a big advantage.
“This enables us to be nimble in finding stocks and idea execution which has been important in recent volatile markets. The key is to know what you’re looking for,” said Mr Beck.
The fund invests in global companies (excluding Australian and New Zealand companies) with a market capitalisation of less than US$5 billion that Paradice believes are undervalued by the broader market.
As a concentrated fund, the Paradice Global Small Mid Cap Fund only holds between 40 and 80 companies at any time, and cannot hold more than 15 percent of the capital of a single company. In addition, no more than 10% of the fund’s value can be held in any one security. It is denominated in Australian dollars, with currency exposures unhedged, and can hold up to 10 percent in cash.
The strategy currently has $430 million in funds under management from institutional investors, and has an expected capacity of $2 billion.
About Paradice Investment Management
Paradice was established in 1999 and at present manages over $8 billion in assets for institutional and high net worth clients in Australian Small, Mid and Large Cap equity strategies as well as Global Small Mid Cap equities. Paradice is a privately owned company, encompassing a team of 17 people – 12 of whom are dedicated investment professionals whose uncompromising focus is on performance.
For more information please contact:
David Paradice (managing director) or Tony Hammond (chief operating officer)
Paradice Investment Management
Phone: 02 8227 7400