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Global Small &
Mid Cap Fund

Fund Overview

We invest in a portfolio of global small and mid cap international companies.

Taking a bottom-up approach to investing we undertake deep fundamental research of both the quantitative and qualitative aspects of investee companies.

Our strategy is benchmark unaware because we believe this unconstrained approach allows maximum flexibility to pursue attractive risk-adjusted investments.

Our intention is to hold high-quality businesses that generate attractive returns on capital employed through a full market cycle, with low levels of debt, managed by highly competent and aligned executive teams.

We aim to achieve annualised returns, in excess of the MSCI World SMID Index (after all fees and expenses) measured over a market cycle, which we consider to be seven years.

Number of Stocks

30–40

Market Capitalisation

US$500m – $25bn

Style

Long-only quality

Objective

Benchmark +3% (estimated 8–12% p.a through the cycle)

Benchmark

MSCI World SMID AUD (Net)

Responsible Entity

The Trust Company (RE Services) Limited part of the Perpetual Group

Administrator

Mainstream Fund Services

Auditor

Ernst & Young

Performance

Past performance is not indicative of future performance

Research Ratings
& Awards

Responsible Investment

Fairlight’s investment strategy is executed with an ethical mindset.

We use hard exclusion screens to eliminate harmful industries, such as tobacco, armaments, gambling, alcohol and mining.

Each of the companies we research is also scored across a range of environmental, social and governance (ESG) metrics. These generate a cost of capital charge that is an input into a company’s valuation. Companies with relatively poor ESG practices incur a larger discount rate than those that are best practice.

We practice active ownership by engaging with companies on ESG issues (including disclosure) and voting our proxy rights.

Latest Insights

Stock Profiles

Quality Growth On Sale

In theory, the longer dated cashflows from technology shares are less attractive than the certainty on bonds as interest rates rise. We don’t disagree. However, caught in the speculative unwind are several high-quality technology companies, which are highly profitable and attractively priced even when factoring in higher rates.

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Investment Philosophy

Advantages of Decentralization

Over the history of the portfolio the Fairlight investment team has witnessed several long tenured holdings eschew traditional complex reporting structures with great success. This piece explores the similarities in the competitive advantages derived from their decentralized operating structures.

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Annual Reviews

2021 in Review

2021 was a successful year for the Fund, delivering investors a 31% return, outpacing the MSCI World SMID Index by 7 percentage points. Despite a year punctuated by market concerns on inflation, coronavirus variants, China sovereign risk and rate hikes the Fairlight portfolio grew earnings per share in aggregate by 24%.

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Learn more about the Fund

Investor Handbook

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Responsible Investment Policy

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