PenderFund Capital Management (Pender) has announced the opening of two classes of its Pender Small Cap Opportunities Fund.
The award-winning fund is an opportunistic, concentrated portfolio focused on undervalued small and microcap companies predominantly in Canada. It is managed by David Barr, CFA, who targets businesses with strong underlying economics and often seeks out special situations. Following deep fundamental analysis, the fund purchases market-leading companies at a discount to the firm’s estimate of intrinsic value.
The fund reached capacity in early 2015, after which it was capped to protect the best interests of unitholders. The firm took the view that by limiting the amount of capital in the fund it could better maintain its focus on investing in opportunities that are defined in its mandate.
But Pender believes that market circumstances now support the possibility of deploying additional capital. “We originally capped the small cap fund to maintain the existing opportunity set,” said Barr. “However we are seeing a lot of opportunities in small and micro cap Canada, and we have been deploying capital which has taken our cash balance down.”
Barr added that the recent downturn in the US small- and microcap market has expanded the US opportunity set available to the fund, making it more able to deploy capital prudently. “Given current markets, this is a good time to be deploying capital as we can continue to take advantage of the many wonderful ideas we are finding,” he said.
Class B and Class G units of the fund will be sold through prospectus. They are available to all investors through Fundserv, and will remain open until $50 million of additional capacity has been achieved.
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