First Sentier Investors announces launch of Small Cap Long Short Fund
7 October 2022: First Sentier Investors today announced the launch of the new First Sentier Australian Small Companies Long Short Opportunities Fund (the Fund), which implements a strategy that seeks to deliver consistent, absolute returns through all investment cycles.
The Australian Small and Mid Cap Companies team has been successfully managing a long short strategy for institutional clients since October 2008, and the new Fund will be available to wholesale and retail investors.
Dawn Kanelleas, Head of Australian Small and Mid Cap Companies, said the strategy benefits from the team’s in-depth research on smaller companies in Australia.
“Many higher-quality companies will one day grow into large, successful, mature businesses. Identifying these stocks at the beginning of their journey provides investors with potential opportunities for significant capital growth along the way.
“As small companies flourish, revenue and earnings growth have the potential to expand at their fastest rate in the company’s lifecycle – growth that larger, more mature companies can find difficult to replicate from a higher base,” she said.
The strategy’s ability to short sell stocks means it also has the potential to generate positive returns from companies that are expected to go down in value.
“Just as some companies will become large, successful businesses, other companies will flounder, or fall victim to unfavourable market conditions or poor management decisions. Our Long Short strategy has the flexibility to take short positions in those companies for the benefit of the portfolio,” Kanelleas said.
She adds that this approach makes the most of the team’s detailed research capability.
“Our team is focussed on downside risks as much upside potential. The aim for capital preservation is a key tenet of our investment philosophy which lends itself to identifying short opportunities.”