Lonsec awards 'Recommended' to Bennelong Avoca fund

24 May 2012

The Bennelong Avoca Emerging Leaders Fund has been awarded a ‘Recommended' rating by Lonsec. The Fund is managed by Bennelong's small caps team, Avoca Investment Management, which is headed-up by experienced investment professionals, John Campbell and Jeremy Bendeich.

Robust research and portfolio construction process

Avoca's investment process was of particular note in Lonsec's report, highlighting that Avoca "employs a well structured, robust and repeatable investment process. Whilst the firm was only founded in 2011... Avoca's investment process is very similar to that used during the investment team's previous tenure at UBS and therefore can be considered to have been tested through a full market cycle."

The team's five stage investment process "promotes a high level of transparency and leads to a high level of consistency in output," the report noted. "Avoca have introduced some subtle process enhancements with the inclusion of ESG analysis as part of the fundamental research effort and a more refined financial modelling and valuation framework, tailored specifically for the Australian equity small cap market."

Quality people and resources

Lonsec viewed the pairing of Campbell and Bendeich in the portfolio management role as highly favourable, noting that the two were "seasoned investment professionals and pleasingly, a pairing that have developed a reasonably long working relationship together whilst at UBS."

In summary, Lonsec concluded that "the Campbell and Bendeich portfolio management pairing, significant FUM capacity and highly accountable boutique investment structure form the key attractions of this product."

Managing Director of Avoca Investment Management and Portfolio Manager of the Fund, John Campbell, said he was thrilled with Lonsec's rating, in particular their acknowledgement of Avoca's robust research and portfolio construction process. "Jeremy and I believe there is only one way to invest in shares and that's to do a deep qualitative review of the company in question and its industry, model the long-term maintainable cash flows, and value those cash flows on a DCF basis. This is the process we've been operating under for the past eight years and is the heart of Avoca. Lonsec's acknowledgement of our process and people is a positive affirmation for our business," John said.


The Lonsec Limited ("Lonsec") ABN 56 061 751 102 rating (assigned May 2012) presented in this document is a "class service" (as defined in the Financial Advisers Act 2008 (NZ)) or is limited to "General Advice" and based solely on consideration of the investment merits of the financial product(s). It is not a recommendation to purchase, sell or hold the relevant product(s), and you should seek independent financial advice before investing in this product(s). The rating is subject to change without notice and Lonsec assumes no obligation to update the relevant document(s) following publication. Lonsec receives a fee from the Fund Manager for researching the product(s) using comprehensive and objective criteria.