Tribeca Emerging Companies Fund
The Tribeca Emerging Companies Fund (Fund) is an unregistered managed investment scheme that invests in high quality smallcap securities, companies early in their development phase. The Fund’s investment objective is to outperform the S&P/ASX Small Ordinaries Accumulation Index (Benchmark) over rolling three year periods (after fees and expenses and before taxes).
The Investment Manager
Tribeca Investment Partners Pty Ltd (Tribeca) is the investment manager of the Fund.
Tribeca approaches emerging companies investing by firstly ruling out companies with a very high risk profile. Tribeca then compare the relative merits of a broad range of smaller companies and identify those that demonstrate the potential for superior growth, or other attractive attributes. In addition, the valuation of potential investments relative to other investments is an important consideration. With the aim of generating a return that is better than the Benchmark, Tribeca limits the portfolio to a relatively concentrated number of stocks which allows for positions that are meaningful enough to impact portfolio returns whilst also allowing for suitable diversification. Lastly, Tribeca utilises tools to assess the portfolio as a whole to attempt to ensure that the portfolio is not unwittingly exposed to a range of risks.
Tribeca’s investment process has been forged over more than a decade and aims to identify the market leading companies of the future. The investment process will tend to have a bias toward companies with relatively high quality and sustainable earnings streams. The following points summarise Tribeca’s view to building an effective emerging companies portfolio:
- skilful stock selection is critical for an emerging companies strategy given the need for caution with regard to capital preservation
- a relatively concentrated stock portfolio aims to ensure that the benefits of Tribeca’s comprehensive research process is captured, that quality control is maintained and an appropriate level of diversification is achieved, and
- Tribeca’s quantitative tools (called the Portfolio Characteristics Test) examine how a selection of preferred stocks combine in the portfolio and assesses what sectoral or thematic biases are present. Any bias deemed acceptable can be maintained – any unintended or extreme bias will be mitigated by adjustments to holdings.
The Fund has been designed to be compliant with the Emerging Companies component of the Significant Investor Visa Complying Investment Framework. The Fund will invest in ASX listed securities:
- that fall outside the ASX100; and
- have a market capitalisation of less than $500 million at the time of the investment.
The Fund’s investment criteria will provide investors with:
- the ability to gain exposure to companies earlier in their development and in any event, before their earnings growth has tapered off or the market has priced all potential growth of the company; and
- portfolio diversification, as smaller companies tend to perform differently through market cycles, which is in contrast to larger companies.
- The Fund may only invest in securities of companies that have a market capitalisation of less than $500 million at the time of first purchase by the Fund. Investments are to be ASX listed or Australian unlisted companies, but unlisted are to be no more than 20% of the Fund’s net assets. Up to 20% of the Fund’s net assets may be in other Australian exchange listed companies.
- Up to 10% of the Fund’s net assets may be invested in foreign exchange listed companies (e.g. New Zealand) with a market capitalisation of less than $500 million at the time of first purchase by the Fund.
- Up to 30% of the Fund’s net assets can be in previously held assets which have grown their market capitalisation above $500 million.
- The Fund must maintain a minimum of 20 investee companies from three months post the Fund’s inception date
- The Fund cannot acquire additional securities in any individual investment which exceeds 10% of the Fund’s net assets.
- Cash is to be no more than 20% of the Fund’s net assets.
Due to movements in the market or similar events, the guidelines set out above may not be adhered to from time to time. In these circumstances, the Investment Manager will seek to bring the Fund’s investments back within the guidelines within 10 Business Days after the first day of any breach of the guidelines.
A management fee of 2% per annum; and
- A performance fee of 15% above the Benchmark total return subject to a high water mark. The Benchmark is the S&P/ASX Small Ordinaries Accumulation Index.
The Fund is only available to Australian resident wholesale clients within the meaning of section 761G of the Corporations Act 2001. Wholesale clients can obtain a copy of the Offering Memorandum by downloading it from the right hand side of this page. Should you wish to invest, please download and complete the Application Form on the right hand side of this page.