Mariner Financial has launched the Mariner Small Companies Recovery Fund (MSCRF) which it says has been designed to take advantage of a recovery in listed Australian small companies.
With a medium-term investment lock-in period, the fund will be managed through discrete invest mandates by Ausbil Dexia and Souls Funds Management.
The fund is set to benefit from a recovery in the small companies market over the last six month period of significant volatility and sell-down, Mariner Financial executive chairman Bill Ireland said.
Available to both retail and wholesale investors, MSCRF will specifically target undervalued companies which exhibit opportunities for potential increases in value and are anticipated to recover or mature over the medium to long-term.
The fund is suited to investors looking for a growth orientated and diversified allocation to small-caps but with the additional upside of a recovering market, Mariner Listed Equities and Securities manager Nick Thorne said.
"The unique feature of this fund is the medium-term investment lock-in period, which means that investor returns will not be diluted through the effect of redemptions." Thorne said.
"We wanted to provide the right investment structure that will allow the managers scope to invest in these oversold small-cap companies and not have to liquidate their positions due to the behaviour of short-term investors."
The lock-in period until July 2010 will allow investment managers freedom to be selective and opportunistic in their stock selection, Mariner said.
"The current bear market in small-cap industrials has left many companies trading at decade lows and well below our assessment of fair value. Investing in these opportunities now offers significant medium to long-term returns," said Souls Funds Management chief investment officer Frank Villante.
The fund will be benchmarked against the S&P/ASX Small Ordinaries Accumulation Index.
