Soft closure on horizon for small-cap fund
The Prime Value Emerging Opportunities fund could be soft closed in a year or so to protect the small-cap fund’s performance.
Launched in October 2015, the fund managed by Richard Ivers invested in high quality, listed companies outside of the ASX 100.
Ivers said: “I can foresee us shutting in a year or so for new investors as we approach $400 million, the assets have doubled every six months so if that continues then we would need to shut.
“We always had that target in mind from the beginning, it’s about trying to protect performance and we manage some assets for a family office so we have never been focused on asset gathering.”
The fund sought to return 8% per annum and Ivers said this would be harder to achieve if the fund was too large.
“As a fund gets bigger, it has to take more meaningful position in companies and it takes longer to get in and out of positions. We want to be big enough to have scale but not so big that is dragging on our performance,” he said.
Ivers said the fund had performed well including during a market downturn as it tended to perform better when the market was falling and that it had seen broad-based performance across a variety of sectors such as online retail and logistics.
“We have had very few losers, our biggest negative contributor was less than 1%. There is more volatility in the small-cap space and variance of quality so if you can avoid those then you can do really well,” Ivers added.
According to FE Analytics, the Prime Value Emerging Opportunities fund returned 37.5% over one year to 31 August versus returns of 34.8% by the Australian small and mid-cap sector within the Australian Core Strategies universe.
Performance of Emerging Opportunities versus sector over one year to 31 August 2021
AUTHOR
Laura Dew
Recommended for you
Retailisation of private markets such as evergreen funds may seem like appealing options for wholesale and retail investors, but providers risk undermining trust if their products are unclear.
Ethical investment manager Australian Ethical has seen its funds under management rise by a third over FY25 to close out the year at $13.9 billion.
BlackRock Australia’s head of intermediary distribution James Waterworth has taken up a new distribution role at an alternative asset manager, while Antipodes has hired a distribution director.
BlackRock’s iShares ETFs have reported a record first half for inflows, gaining US$192 billion in the past six months, to see overall ETF assets under management rise to US$4.7 trillion as it launches its first active ETF in Australia.
