Veteran Australian fund managers Anton Tagliaferro and Simon Conn have launched a new investment vehicle focused on small-cap equities, positioning their strategy as a counterweight to the growing dominance of quantitative and passive funds in the local market.
The pair, who previously managed funds together, argue that the current market structure—characterized by short-term momentum chasing by algorithmic traders and passive capital—has created significant dislocations.
The Australian technology sector, for instance, has seen a 40% decline over the past 12 months, prompting some investors to view current valuations as attractive entry points.
They believe these conditions favor a return to traditional, fundamentals-based stock picking, particularly in the small-cap segment where liquidity constraints and lower analyst coverage can exacerbate pricing errors.
This launch aligns with a broader shift in Australian institutional investing.
Recent data indicates that fund managers are increasingly rotating away from traditional market heavyweights and into sectors that have traded at significant discounts, including technology, healthcare, and consumer stocks.
The Australian technology sector, for instance, has seen a 40% decline over the past 12 months, prompting some investors to view current valuations as attractive entry points.