US-based THB and Australia’s Brookvine have brought international micro-cap investing to local investors with the launch of the THB International (ex-USA) Micro Cap Fund.
The strategy seeks to provide access to the large and under-invested universe of international micro-cap stocks and invests in all major developed markets outside the US.
The new fund complements the THB US Micro Cap Fund, which boasts a 21.3 per cent per annum return (in US dollars) since inception in 2015 through to 31 July 2018.
Seeded by IOOF Investment Management with an initial investment of $40 million, the fund is now available to wholesale investors in Australia and New Zealand, Brookvine said.
IOOF’s deputy chief investment officer, Stanley Yeo, said IOOF Investments is a longstanding supporter of emerging opportunities that can produce out-sized returns and add to overall portfolio diversification.
“THB’s specialist management of this inefficient and under-invested segment of the non-US equity market expands our global equity opportunity set, with a view to contributing to long-term returns for the IOOF MultiMix International Shares Trust,” he said.
Brookvine CEO, Steven Hall, said he was excited by the expansion of the four-year partnership with THB, which had focused to date on US micro caps.
“Like its US counterpart, international (non-US) micro-cap stocks have favourable characteristics including a large universe of companies, little to no sell-side coverage, few investment managers with a credible track record or process, and a low correlation to global equities,” he said.
“We’ve received strong interest from forward-thinking investors who wish to diversify their equities exposure across markets and beyond large-cap stocks. Many investors also view micro caps as an alternative to private equity.”
