Lennox Capital founders James Dougherty and Liam Donohue have launched the Lennox Australian Microcap Fund to complement their flagship small companies fund.
The new microcap fund, launched with Challenger-owned Fidante Partners, is an actively managed “style-agnostic” portfolio invested in a range of microcap equities.
The fund will be benchmarked against the S&P/ASX Small Ordinaries Accumulation Index and hold between 20 and 40 Australian and New Zealand-listed securities.
Mr Donohue said the new fund will invest in under-researched companies that have had their valuations miscalculated by equity markets.
“That could be [due to] structural change such as technological innovation; it could be cyclical change within an economy; or company specific change,” Mr Donohue said.
“We believe that the information that comes out of that change is processed inefficiently by equity markets and therefore creates mispricing and opportunities for active managers such as ourselves.”
“Our strategy for the microcap fund follows the same structured and repeatable process as our small companies fund, with an emphasis on risk management, which is crucial for success in this volatile sector of the market. Our investment philosophy leads us to invest in well-managed, well-governed companies that have forecastable earnings.”
