Bennelong unveils global small & mid-caps fund with ex-Magellan partner

Bennelong Funds Management has announced a new partnership with former Magellan equities managers that will give its clients access to high-performing global small and mid-cap stocks.

The Global Small & Mid Cap Fund has been launched in partnership with the recently established boutique investment manager Canopy Investors.

The Canopy fund, Bennelong notes, invests in a concentrated portfolio of high-quality and attractively priced small and mid-cap listed companies, with balanced exposures across a range of sectors and regions.

The fund is headed by Canopy founders and ex-Magellan small and mid-caps funds managers Kris Webster and Michael Poulsen.

Paulsen said 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.”

Bennelong chief executive John Burke identified “great opportunities” in the current small to mid-cap market. He added that the new Canopy 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 added that allocations to small and mid-cap companies enable investors to break away from the increasingly concentrated large-cap index.

“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 more than 5,000 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.”

Burke praised Webster and Poulsen as “high-calibre investment managers. Their experience and track record in managing global equities created an outstanding opportunity to bring a great team and fund to our clients, and Australian investors more broadly.

The pair collectively boast 30 years of investment experience in listed global equities, with a decade-long partnership. They previously led the small and mid-cap team at Magellan Asset Management before founding Canopy Investors last year.

“As a business, our approach is to partner with high-quality boutique asset managers and bring high-grade investment product[s] to the Australian market,” Burke said.