Boutique Australian equities manager ECP Asset Management (ECPAM), headed by Dr Manny Pohl, has released the prospectus for Barrack Street Limited, a new listed investment company (LIC) targeting small and mid cap listed Australian equities.
The offering is targeting a maximum of $50million, with the LIC aiming to achieve medium to long-term capital growth and income through fully franked dividends.
Barrack Street will aim to exceed a benchmark return of 8%pa
Dr Pohl has achieved outstanding results in the small and mid-cap segment during his 30 years of investment experience. He was recognised with multiple awards during his tenure as Managing Director and Chairman of the Investment Committee at Hyperion Asset Management, including Equities (Small Cap) Fund Manager of the Year (2011), Australian Equities (Small Cap) Fund Manager of the Year (2010) and Best Performing Australian Boutique Fund Manager (2009).
Applying the same investment strategy that has formed the basis of Dr Pohl’s investment career, in the period from inception in July 2013 to March 2014, ECPAM has returned 24.8% against a benchmark return of 5.3%, and the ASX Small Ordinaries Accumulation Index which has seen a modest return of 5.4%.
Dr Pohl said a particular target investor of the Barrack Street Investments LIC capital raising would be small super funds, that is, those with fewer than five members.
“Its widely acknowledged that SMSFs bias are heavily weighted to ASX top 50 companies and cash.
“Barrack Street will provide investors with a convenient and familiar pathway to high quality stocks outside the ASX top 50, an area where ECPAM and its team has an enviable and long-term track record.
“ECPAM’s philosophy is based on two hypotheses about market inefficiencies. One is that, on average, the market undervalues extremely high quality, capital efficient growth businesses.
“The second is the market tends to over emphasize temporary themes and short term factors.
“At ECPAM we buy businesses with superior economics. We buy to hold, not trade. And the basis of our purchasing decisions is seeking well priced, underlying value opportunities. We aim to structure portfolios with higher weightings in stocks with long-term returns above the risk free rate.
“Some of the Hallmarks of the ECPAM approach include not trying to predict short term price movements and not investing in high risk businesses. We don’t invest businesses that do not meet quality thresholds. Our definition risk is where a business does not meet a benchmark IRR, not deviation from an index.
“Our approach and track record demonstrate to us there is a strong demand for a specialist small and mid cap investor with this type of bottom-up, value based investing philosophy. We believe it will find favour with the increasing number of SMSF trustees looking for strong income yields, capital growth and low risk.
The offer is priced at $1.00 a share and investors in the IPO will receive a free 24 month option for every share they subscribe for, exercisable at $1.00. Morgans Corporate is Lead Manager to the Offer which is scheduled to close on 31 July.
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