Cromwell Funds Management Limited (CFM) and Phoenix Portfolios Pty Ltd (Phoenix) believe that over the medium to long term, superior investment performance may be achieved by investing in securities that are trading at a discount to their underlying intrinsic value.
Across global markets, some of these securities have readily ascertainable and observable NAVs. A number of these securities trade at significant discounts to their observable NAVs. This is particularly true in areas where a limited number of analysts are scrutinising company valuations. This can give rise to situations where companies trade well below our assessed value.
Phoenix aims to blend together a portfolio of predominantly “under-researched” securities with free float market capitalisation of less than US$5 billion, where pricing discrepancies are often the largest.
CFM has initially capped the Fund size at $100 million of Net Trust Value to allow the Fund to maintain its strategic advantage over many of its competitors, as it facilitates investment in a wider universe of securities.