Datt Capital helps advisers meet retail small-cap demand
Australian equities manager Datt Capital has built a retail-friendly version of its small-cap strategy, previously only available for wholesale investors.
The Datt Capital Small Companies Fund, launched in 2023, will now have a Class B share class available, enabling advisers to use it with their retail investors and via investment platforms.
The fund offers diversified sector exposures and growth drivers in the small-cap universe, closely tied to domestic demand and structural trends across resources, technology and other innovative sectors.
It employs an active, benchmark-agnostic strategy, typically holding 15- 25 high-conviction positions, all outside the ASX 100. It may also selectively allocate to pre-IPO opportunities.
Datt Capital chief investment officer, Emanuel Datt, said: “The launch of this retail fund reflects rising wealth adviser demand for specialist small cap exposure at a time when Australian smaller companies appear poised for a multi-year recovery after an extended period of underperformance. Australian small caps are now offering a more attractive risk-reward profile than many crowded large-cap names.
“For investors looking not just to own this segment but to generate differentiated returns, we believe a specialist strategy such as the Datt Capital Small Companies Fund provides a more targeted way to access the theme.”
Over the 12 months to 31 October, the fund has returned 44 per cent versus returns of 22.8 per cent by the ASX Small Ordinaries index.
Last week, Tyndall Asset Management echoed Datt Capital when it stated it is seeing “substantial market demand” for its small-cap franchise. As a result, this will be repositioned and rebranded as a new affiliate. The new affiliate will be led by co-portfolio managers Tim Johnston and James Nguyen and supported by Scott Hudson and be backed by Yarra Group’s sales, marketing and operations infrastructure.
Head of Australian equities Johnston has worked at Tyndall for over 25 years while Nguyen joined in 2008. Hudson is the most-recent hire, having only joined Tyndall as a deputy portfolio manager from MST Financial earlier this year.
Commenting on the small-cap division, Tyndall said: “There is substantial market demand for the category – with only a few small cap quality franchises with available capacity – and reflects the strong and consistent outperformance the small cap team has delivered since its inception in March 2023.”
On the other hand, this small-cap demand is not being observed universally as Clime Investment Management announced it would be closing its $32 million retail Clime Smaller Companies fund, a portfolio of Australian smaller companies targeting strong risk-adjusted returns.
Instead of targeting retail investors, it will expand its fund offering to Australian wholesale clients, those self-directed investors who meet the wholesale investor test.
AUTHOR
Laura Dew
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