Research boutique Zenith Investment Partners has revamped its Australian small companies recommended list with the researcher adding nine new managers and dumping two funds following a review of the sector.
The review has also led Zenith to elevate three managers Macquarie, Patriot and Contango from a recommended rating to highly recommended.
Zenith said that the managers were promoted to highly recommended due to factors such as additional team resourcing, team stability and strong relative performance.
Two funds, Pengana Emerging Companies Fund and Smallco Investment Fund, were removed from Zenith’s list.
A further two funds, Ausbil Australian Emerging Leaders Fund and Eley Griffiths Group Small Companies Fund, were downgraded from highly recommended to recommended.
Zenith said it removed both managers because they were quickly approaching their stated level of fund capacity and in the case of Ausbil, had experienced some investment team instability at the analyst level.
Both however, remain on the recommended list and are endorsed by Zenith due to their strong track records in small (EGG) and mid (Ausbil) caps.
New entrants on the recommended list for 2008 include Adam Smith, UBS, Portfolio Partners and Perennial.
Perennial joined the list as it is already an endorsed manager in large caps and is now entering the small cap arena, while Portfolio Partners was upgraded as it is now regarded as a stable, growth orientated manager.
Zenith indicated that there were no deliberate style bias when composing the shortlist of candidates to review or add to its recommended list.
The changes come after Zenith conducted due diligence on 16 of the 31 fund managers on its database.
