Micro Opportunities Fund
A diversified portfolio of micro-cap (<$500m market capitalisation) Australian companies spread across industries and stages of development. Acorn Capital looks to invest in innovative companies that display sustainable competitive advantage and strong management teams.
A diversified portfolio of Australian microcap companies.
Acorn Capital (Acorn) constructs microcap portfolios from the full universe of ASX sectors, the full range of company development stages, and both listed and unlisted IPO opportunities.
Investment management by Australia’s most experienced microcap fund manager.
Acorn is the pioneer of Microcap company (Microcap) investing and is Australia’s longest running specialist microcap fund manager.
Strong fee alignment and capacity management.
- A performance fee will only be paid if the fund’s returns are above both the benchmark and 0%
- Acorn will hard close the fund at $150m, thereby preserving and optimizing return potential for existing investors
The state of play
Unit Price (Entry)
October 31 2023
Unit Price (Exit)
October 31 2023
What are Microcaps
Microcaps are amongst the most dynamic companies listed on the Australian stock exchange (ASX). They have a market capitalisation of less than $500 million. Compared to larger capitalisation (Large Cap) companies, Microcaps are typically younger, faster growing, and more innovative. Such companies often report greater increases in sales, profitability, and productivity than older, larger and less innovative companies. Further, they are often require capital to fund higher growth and the fund is positioned to provide growth capital.
Microcap investing provides exposure to earlier stages of a company’s development, with the majority of microcap businesses being in (or about to enter) the growth or expansion stages of their lifecycle. Microcaps also provide exposure to different investment themes than Large Cap. For example, the ASX microcap segment has greater industry diversity and is less concentrated in Financial and Resources companies than the Large Cap segment.
The fund aims to:
- Outperform the S&P ASX Emerging Companies Accumulation Index (the benchmark) over rolling 3 year periods
- Generate its returns with lower volatility than the benchmark
- Capital growth through a diversified exposure to Australian microcaps
- An active investment approach
- A long term (5+ year) investment
- A SIV compliant investment
*As defined by the Corporations Act
Key Fund Terms
Unregistered Unit Trust.
Exceed the returns of the benchmark over rolling 3 years periods.
S&P ASX Emerging Companies Accumulation Index.
Australian Equities1,2 up to 80-100%, Unlisted Investments3,4, 0-10%, Cash 0-20%.
$100m (soft), $150m (hard).
20% of returns in excess of the benchmark.7,8,9
Minimum of 5 sectors, Maximum of 20% of the fund’s net assets allowable in any one sector.
Lifecycle stage risk guidelines
Seed/startup 0-5%, Early 10-40%, Expansion 40-70%, Mature 10-20%.
The fund is permitted to borrow up to 5% of NAV to apply to redemptions. Borrowings may not be used to leverage or gear the fund.
The fund is long only. The fund is not permitted to short sell securities.
Evolution Trustees Limited.
Hub 24, Netwealth, Ausmaq.
1. ASX ex $500m market capitalization stocks at time of purchase. Up to 30% of fund net assets can be held in Australian companies that subsequently grow beyond $500m.
2. Positions will only be taken in Australian unlisted companies where a liquidity event (e.g IPO, trade sale) is likely within 6-12 months.
3. Unlisted securities may include equity and convertible notes.
4. No further purchases can be made in any company that exceeds 10% of the fund’s net assets.
5. Exclusive of expense recoveries of 15bp (excludes deal related legal fees and deal transaction costs).
6. Subject to prior High Water Mark (HWM) being exceeded (no HWM resets allowed).
7. Subject to the Fund’s return also exceeding 0%.
8. Calculated after management costs and expense recoverables have been deducted.
9. Calculated daily and paid quarterly.
10. Acorn defined sectors (GICS or aggregated GICS, with Acorn reclassification of companies where appropriate).
The rating issued 09/2023 is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2022 Lonsec. All rights reserved.
Fund Information Memorandum
Additional Investment Form
HEALTHCARE & INDUSTRIALS
Experience: 17 / 19
CONSUMER, TECH, TELCO
Experience: 9 / 26
This report is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security by the sender or Acorn Capital ABN 51 082 694 531 (AFSL 227605). This report does not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision. Any person considering investment in the Acorn Capital Micro Opportunities Fund (“the Fund”) should first review the Investment Memorandum for the Fund dated 20 March 2020 and any other material published by Acorn Capital. This information is available at www.acorncapital.com.au. Evolution Trustees and Acorn Capital does not guarantee repayment of capital or any particular rate of return from the Fund. Past performance is no guarantee of future performance. Investment returns have been calculated in accordance with normal industry practice utilising movements in unit price and assuming reinvestment of all distribution of income and realised profits. Statements of fact in this report have been obtained from and are based upon sources that Acorn Capital believes to be reliable, but Acorn Capital does not guarantee their accuracy, and any such information may be incomplete or condensed. All opinions and estimates included in this report constitute Acorn Capital’s judgement as at the date of this communication and are subject to change without notice.