Brunel's new multi-manager fund offers access to global small caps
Brunel Pension Partnership (Brunel), one of eight pooled Local Government Pension Scheme funds in the UK, has launched a Global Small Cap Equities Fund.
The sub-fund will manage a mandate of approximately GBP300 million.
Our clients asked us to create a portfolio offering exposure to the small cap premium as the primary driver of returns.
“The Global Small Cap Equities Fund gives our clients access to a range of investment approaches, with low correlation between our chosen managers,” says David Cox, Head of Listed Markets at Brunel. “The manager allocations reflect how the fund is constructed to ensure a balancing of conviction, risk and liquidity considerations.”
Brunel evaluated 33 different strategies as part of a two-stage selection process. We invited 12 managers to tender, shortlisted five for due diligence meetings, and ultimately appointed three managers to the mandate.
“The blended solution gives clients access, within the small cap universe, to a range of market cap exposure” said Stephanie Carter, Portfolio Manager for the Global Small Cap Equities Fund. “We also worked hard to assess managers on how they would integrate our Responsible Investment principles and engage with holdings. As a result, each mandate has robust or developing ESG integration and engagement, in an asset class sometimes seen as a laggard in this area.”
Matthew Trebilcock, Client Relationship Director, says: "The launch of the Global Small Cap Equities fund offers our partner funds access to a different asset class and a different set of growth drivers. Given their long-term horizons, that’s very valuable, both in terms of capturing different opportunities, and of reducing correlation across their portfolios."
The sub-fund largely targets investments in developed markets, as defined by inclusion in the MSCI World Small Cap index. The sub-fund outperformance target is +2-3 per cent net of fees for Global Small Cap.
Cedric Durant des Aulnois, CEO of Montanaro Asset Management, says: “We are delighted to have been selected by the Brunel Pension Partnership after a thorough and rigorous due diligence process. We look forward to mobilising our 30 years of experience in quoted Small Cap to create value for Brunel and its clients in the years ahead. All of us at Montanaro are truly excited by this opportunity”.
Ben Day, Director, Head of UK, American Century, says: “American Century Investments is thrilled to be appointed by the Brunel Pension Partnership to manage a Global Small Cap Equities mandate on behalf its members. We were impressed by the rigour of the selection process and the level of due diligence undertaken. We are pleased that our unique, growth-oriented style of small cap investing was a good fit in Brunel’s manager line-up and look forward to helping them achieve their long-term-focused investment objectives.”
Johan Cras, Managing Director & Head of Institutional Relations, Kempen Capital Management, says: “We are delighted to have been appointed in Brunel’s Global Small Cap Equities Fund. The rigour of the selection process highlighted our stock-specific, value- oriented approach and, importantly, the deep integration of sustainability in the investment process. We look forward to developing a productive, long-term relationship with Brunel.”