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We work hard – we screen, analyse, meet, and assess companies looking for the best smaller companies listed on the market
MHOR looks for investments that exhibit a specific set of characteristics;
- Opportunity to take advantage of growth and positive alignment with industry themes and trends.
- Quality businesses, competitively advantaged products or service offerings.
- Financial flexibility, appropriately resourced to capture its opportunity.
- Management with the vision and capability to bring it all together.
- Fundamentally undervalued.
OUR INVESTMENT APPROACH
There is a large universe of potential investments out there, MHOR reduces this universe down to a short-list by applying a series of screens designed to highlight the early stages of factors it considers to be of interest.
MHOR also applies some insights based on its understanding of what’s happening at a sector or industry vertical level, specifically looking for industry level trends and themes.
Companies that are identified with the potential to take advantage of changing industry conditions make it onto this short-list.
From here MHOR’s investment team prioritises the short-list based on anticipated fit for the portfolio and the timing, extent and likelihood of catalysts that could crystallise the potential opportunity it sees.
Based on this ordered set of priorities MHOR applies its “bottom-up” investment research process, looking for quality businesses that are mispriced, misunderstood or importantly undiscovered.
HUNTING HIGH QUALITY BUSINESSES
MHOR’s typical investment research process will involve; understanding the target investment’s value creation drivers – its business, its products, its financial capacity and its position in its industry.
Scenario based valuation analysis is applied to understand how the market may price the investment if the company can deliver on MHOR’s vision of the opportunity it faces. MHOR’s investment team will meet with management and other stakeholders that can offer a perspective on the target investment’s business, utilising an extensive network of contacts relevant to the addressable investment universe that can help deliver insight on the fundamental drivers of each candidate investment.
BACKING GREAT MANAGERS
MHOR values the quality of management highly in its investment decision making process. MHOR looks for management teams that understand how their business fits into the dynamics of their industry, with a compelling strategy to capture the opportunity, and have the ability to communicate their plans for growth and value creation.
In assessing the suitability of management capability and strategy MHOR believes it has an edge; MHOR’s team has direct experience of running high growth businesses. A former ASX listed CEO conducts due diligence directly with management teams of target investments providing, that ‘edge’ on assessing management’s ability to deliver.
Portfolio Construction: The portfolio is constructed of investments that have made it through the investment process, investments are monitored to ensure that they continue to earn the right to remain there.
The portfolio is constantly monitored to ensure that its construct is appropriate and that a balance is maintained between risk and reward with the aim of delivering the investment objective over the medium to long term.
*The fund is daily priced. The price is based on market close the business day prior.
The MHOR Australian Small Cap Fund consists of a diverse portfolio of quality small cap companies.