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Media Release | 06.10.21

Blue Orbit Launches Global Small Caps Systematic Alpha Fund

6 October 2021

Following the success of its systematic Australian Small Caps Strategy, Blue Orbit has today announced the launch of the Blue Orbit Global Small Caps Systematic Alpha Fund, targeted at wholesale and institutional investors.

Blue Orbit specialises in investing in smaller, more inefficient markets, such as Global Small Caps and Australian Small Caps. Companies in these markets can behave very differently to their large capitalisation counterparts and require a different lens for analysis.

Small cap stocks are considered the engine room of the global equity markets: companies in this space are generally not limited by macro-economic constraints and have the potential to increase their earnings by large multiples. These opportunities do come with risks however, and managing those risks comes down to well-designed diversification, and to thoughtful and experienced portfolio construction.

The portfolio management team for this strategy, led by Megan Talmage, has run a paper portfolio since the end of 2020, which has seen strong outperformance over its global benchmark.

“Systematic strategies perform well in inefficient market segments, however fewer firms apply systematic strategies outside of large caps,” said Talmage.

“Those that do tend to roll out a systematic strategy based on research built on large cap stocks and data sets; it’s our observation that what works for large caps does not necessarily translate to the small cap universe.”

“This has given us an opportunity to build a process specifically targeted to the idiosyncrasies of the small cap market.”
In commenting on the launch, CEO and co-founder Adam Randall said, “With such a large number of stocks, and similar size to the Australian mid-caps, investors see this space as a great alpha opportunity.”

“When we first founded Blue Orbit we planned to launch a global small caps strategy. We have spent a lot of time and effort developing the investment strategy, and the whole team has done a fantastic job to launch this as a wholesale registered trust.”

“This is a big step in the growth of our business, and we are pleased with the great support from our partner Costa Asset Management.”

Blue Orbit’s quantitative, data driven approach is able to analyse the entire opportunity set of companies at the same time with in-depth, evidence-based analysis and rigorous fundamental oversight.

 

Media enquiries:

Julie Andrews
Co-founder, Director and Head of Distribution
0408 518 553
Julie.andrews@blueorbitam.com

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