Fairlight doubles FUM inside a year
Fairlight Asset Management, a firm that invests exclusively in global small and mid-cap (Global SMID) equities, has doubled its funds under management (FUM) to $700 million in under a year, after recording a surge in investor demand for SMID strategies.
The Fairlight Global Small and Mid-Cap Fund has delivered annualised returns of 21.2% and has outperformed its benchmark by 6.9% as of 31 October 2021. Since its inception, the fund has also delivered top quartile performance with bottom quartile volatility.
The fund invests in a concentrated portfolio of 30 to 40 businesses with market capitalisations between US$500 million and US$30 billion. It targets Global SMIDs in developed markets and is focused on quality, aiming to outperform the MSCI World Small & Mid Cap Index in Australian dollars by 3% p.a. over rolling seven-year periods.
The fund is managed by Nicholas Cregan and Ian Carmichael and is supported by a team of Global SMID specialists, including Will Dowd who is temporarily based in New York.
“While historically investors were focused on large cap equities for their global exposure, they are increasingly recognising the strong return potential of the Global SMID sector, which has driven strong inflows for Fairlight,” Cregan said.
Zenith Investment Partners also recently awarded the fund a ‘Highly Recommended’ rating and noted the diversified investment categories in the fund, the qualitative screens that streamline research and Fairlight’s thorough due diligence fund.
“We are delighted that our Fund has been recognised with a ‘Highly Recommended’ rating from Zenith, which we believe reflects our integrated and seamless team approach, our investment to embed people in international markets making us one of the few domestic managers to regularly carry out on-the-ground research, and our distribution relationship with Perennial Partners,” Cregan said.
“Looking forward, while some sectors including international travel and industries that rely on face-to-face sales may be impacted by further COVID-19 outbreaks, we remain positive on the medium to long-term outlook for the Global SMID sector,” Carmichael said.
“Companies are still running leaner than they were pre-pandemic and valuations are sitting around our measure of fair value, which is attractive in a market where valuations for bonds, property and large cap equities are looking stretched.”