30 August 2011
Zenith Investment Partners (Zenith) has awarded a ‘recommended' rating to Bennelong Funds Management's small caps fund, the Bennelong Avoca Emerging Leaders Fund.
The result of a recent joint venture between Bennelong Funds Management (Bennelong) and Avoca Investment Management (Avoca), and headed by part owners and co-portfolio managers, John Campbell and Jeremy Bendeich, the fund provides access to a unique portfolio of Australian small companies.
"The joint venture arrangement is extremely robust, with the support of Bennelong allowing the Avoca investment team to focus purely on investment duties and enabling them to establish a high quality funds management business", said Zenith Investment Analyst, Nicholas Busst.
Experienced, qualified team
John, who has over 20 years of experience, is highly regarded by Zenith, while Jeremy's "desire to be a ‘career' small companies portfolio manager" is also seen as a positive for the Fund. Michael Vidler, who supports John and Jeremy as a senior investment analyst, has the experience and skill set Zenith believes complement the team well.
Nicholas notes, "all members of the Avoca investment team are experienced and contribute a considerable level of knowledge of small companies stocks and the industry they operate in". He considers the team to be "amongst the more experienced in the Australian small capitalisation universe".
Despite the fund's short history, Zenith acknowledges the previous strong working relationship of the three team members and their prior demonstrated ability to comfortably outperform the benchmark and median manager.
Overall, Zenith believes "the strength of the Avoca investment team's portfolio management and research experience provides the fund with a competitive advantage".
Relationships, reporting and robust process
Zenith's review identified the team's strong industry relationships and company management contacts as invaluable, considering the sector's low coverage. While the team's Company Analysis Reports - critical qualitative assessments of the business, management, strategy and competitive positioning of stocks identified at the idea generation stage - as a strong feature of the process.
Zenith admires Avoca's thorough and robust fundamental bottom-up stock selection process and its intrinsic value approach, believing both to be key competitive strengths of the fund.
Avoca Investment Management is one of the latest additions to BFM's growing suite of asset managers and provides the firm's only Australian small companies offering.
John Campbell, Avoca's Managing Director and Portfolio Manager, said "it is always gratifying when a third party of Zenith's reputation praises your team's efforts. While Avoca was only launched in May, Jeremy and I have a strong history of working together. This, coupled with our co-ownership of the business, provides us with the impetus to continually strive for long-term outperformance for our clients".