Neophyte value boutique Concise Asset Management has begun investing the seed capital put up by listed private equity firm CVC Limited, as it seeks to chart a new path in the crowded Australian equities space with its Concise Mid-Cap Fund.
The Melbourne-based Concise runs a mid-caps portfolio, delineating its universe as the stocks ranked 51st to 200th in the S&P/ASX 200. Standard & Poor's has been engaged to create a benchmark index for the fund, known as the Concise Mid-Cap Masters Index.
Concise was founded in October last year by portfolio co-managers Andrew King (ex-Investors Mutual), David Grace (ex-Centro) and David Parr (ex-UBS Global Asset Management), who will handle marketing, risk management, compliance and client liaison.
The fund will hold 25 to 40 stocks, with an upper cash limit of 10 per cent.
The style is value, bottom-up stock-picking. "25 to 40 stocks sounds concentrated, but when you have a stock universe of 150, you're getting a reasonably diversified portfolio compared to the index," King said.
The minimum investment is $25,000, with a management expense ratio of 1.20 per cent and no performance fee.
"No-one else fills this space with a pure mid-caps, value-style fund," Parr said.
"We're talking to the dealer groups that mainly do direct equities, saying that we believe there should be a managed solution outside the Top 50, where investors can get access to mid-cap stocks. There's a really good space there in risk-return terms. That's how we'll be approaching the dealer groups, the research houses and the platforms."
The tailored index is critical to this marketing approach, Parr said.
"We're trying to provide a pure mid-caps solution, and the only way you can do that is by being benchmarked against a pure mid-caps index," he says.
Concise plans to establish a straight ASX 200 fund once its business is established.
