Reasons to Invest in Pender's Small Cap Opportunities Fund?
1. Expert Portfolio Manager
David Barr, CFA is the Chief Investment Officer at Pender and the Portfolio Manager for the Pender Small Cap Opportunities Fund. He is a value investing specialist with over ten years of knowledge and expertise in the venture and small cap technology sectors.
He manages the fund with the goal of capital preservation, growth and low volatility relative to comparable funds.
2. Finding Value
The manager employs a value-based approach to finding investment opportunities that offer the potential for long-term capital appreciation. Using rigorous bottom-up analysis, he tracks a pool of potential investment opportunities until he is confident in their intrinsic value. He then aims to buy at a substantial discount to intrinsic value.
3. Margin of Safety
The difference in intrinsic value and an undervalued share price offers a margin of safety. Should markets drop, the aim is that the carefully selected stocks in the fund have less far to fall, and capital is better protected.
4. Realizing Returns
Making investments at below a company’s intrinsic value is only half the story. The second part is realizing returns on such investments. The manager looks for companies that have a potential catalyst to unlocking the value of the investment, such as a merger or a takeover.
The technology sector has matured over the past decade and although it continues to be volatile, the level of M&A activity provides excellent opportunities to buy and sell at the right price.
5. Market Inefficiencies
The Small Cap Opportunities Fund has been designed to take advantage of market inefficiencies – temporary or otherwise. Many small cap companies lack analyst coverage and are not widely followed or understood by the market. They are overlooked by bigger investment firms, which have prescribed investment cut-off levels.
6. Concentrated Portfolio
The Fund invests in a concentrated portfolio of well-managed businesses. Continuous due diligence is undertaken to actively manage existing positions and to track a roster of target holdings. When investment criteria and valuation thresholds are met the manager has the opportunity to buy at the right price or to allocate additional capital to an existing holding.
7. Why Small Cap Companies?
We believe that:
- Small cap companies, with strong competitive positions are able to build intrinsic value faster, and may even outpace the economy.
- Due to their size, smaller companies have shown an ability to respond quickly to change.
- Once the market recognizes the intrinsic value of a business, there is an upward correction in the market value.