New investment boutique Whitman Asset Management is targeting £25m with a new fund launch focused on UK smaller companies and Aim-listed stocks.
The TB Whitman UK Small Cap Growth fund invests in 30 to 50 growth stocks, typically with market capitalisations under £1.6bn and will be managed by CIO Christopher Pease.
The fund will focus on companies with: strong management teams with “meaningful” equity ownership; strong competitive advantage; predictable cash generation; and a cycle of reinvesting cash at a high level of return.
Pease previously worked at Sarasin & Partners and Henderson Investors. He will be supported by co-manager Joshua Northrop, who was previously a small-cap specialist at Hargreave Hale.
Whitman chief executive Araminta Le Flufy said she was excited that £15m had already been raised for the fund. “The combination of Christopher’s track-record, small initial size of the fund and the established team at Whitman is a powerful combination. We believe the timing for this launch is right, with the current valuations of UK smaller companies attractive on a historic basis within an asset class where alpha is easier to find.”
The fund launch comes a month after Sanford Deland Asset Management pulled its Buffettology Smaller Companies investment trust, which was also going to focus on UK smaller companies and was targeting £100m for its IPO. Also in October, the Tellworth British Recovery & Growth Trust pulled its IPO due to a lack of demand.
Market sentiment has since improved due to positive trial results for three different Covid-19 vaccines, although uncertainty still remains in the UK over the imminent end of the Brexit transition.
But Pease said the case for investing in smaller companies is stronger than ever. “Our private client small cap portfolios have continued to perform well during the Covid crisis: indeed, the crisis has helped throw into sharp relief just how fleet of foot smaller businesses can gain the edge over their larger company competitors.
He added: “The move to working from home illustrates this. The need for cloud computing, video communications tools and unified communications systems are all features of this developing paradigm from which a number of smaller companies will benefit. Moreover, the further shift to online commerce and digital media forms a natural environment for small, adaptable businesses to thrive.”
Whitman Asset Management was founded in 2018 and has so far been focused on its private client investment management division, which looks after investments for private clients and financial planners, and Aim portfolios via segregated accounts that benefit from IHT relief.
TB Whitman UK Small Cap Growth is the first fund from the company. Its offer period closes on 8 December.
