ECP Growth Companies Fund
A high conviction, all cap Australian equity portfolio designed for alpha generation
Outperform its index by over 2-4% p.a. over 5 years
Investors seeking to diversify their equities exposure with an active, high conviction investment approach with an investment horizon of five years or more.
The Fund is designed to be used as an alpha generation strategy within the Australian equity allocation of an investor’s portfolio. The Fund employs a highly active, growth-based investment style and this may offer complementary benefits with other more index-based investments in an investor’s portfolio, such as passive equity funds or Exchange Traded Funds. The specific allocation of the Fund in the portfolio will depend on an investor’s own objective and risk tolerances, which can be determined with the help of a qualified financial adviser.
The ECP Growth Companies Fund is a high conviction, growth-oriented, Australian all-cap equities portfolio that is concentrated, holding between 25 and 30 stocks at any time. The Fund will seek to invest in ASX-listed companies that have strong earnings growth potential. As an ‘All Cap’ strategy, the Fund can invest across the market capitalisation spectrum.
The Fund seeks to identify and invest in high-quality growth businesses that can generate predictable, above-average economic returns, both in terms of their price appreciation and earnings potential. These companies are typically in the growth stage of their life cycle, and as they grow, are expected to deliver superior investment performance and wealth creation benefits back to the Fund’s investors.
The process that ECP employs in its quest to isolate the best opportunities from the rest, is based on a repeatable set of steps. Every stock is considered on a consistent set of key factors, and assessed using the skills and judgement of the investment team. The four main stages in the investment process are shown below:
Asset Selection: ECP looks for high quality businesses, in the growth stage of their lifecycle, that are capable of generating above average returns on their invested capital through time.
Portfolio Construction: ECP allocates capital based on the relevant expected rate of return in order to maximise return over the investment time horizon. Weights are adjusted to account for medium term risks including predictability of earnings, and liquidity.
Implementation: This is the process for matching the actual portfolio to the theoretical portfolio. The goal is to ensure transaction costs are minimised through time, but maintain a portfolio that is reflective of the model.
Review: Review what worked and what didn’t. Look at ways to incrementally improve the process, prove concepts work and implement them.
The strategy seeks to exploit market inefficiencies such as (1) Growth anomaly, where the market undervalues extremely high-quality, capital efficient, organic growth businesses, and (2) Time arbitrage, where the market tends to overemphasize temporary themes and short-term factors.
ECP Asset Management is an active equity fund manager established in Sydney in 2012, with the founders having a successful track record at a previous fund manager.
The investment team includes investment professionals with a diverse array of experience both internationally and across industries.
Manny has over 35 years experience in investment. He founded Hyperion Asset Management in 1996 and was it’s CEO, Managing Director and Investment Committee Chairman until 2012. Manny is also a member of the South African delegation to the Annual Meeting of the Board of Governors of the World Bank and the International Monetary Fund. With this level of ambition, it’s unsurprising Manny also has a black-belt in Karate and enjoys action novels!
Prior to joining ECP Andrew worked for over 13 years in equities sell-side research with both Macquarie Bank (9 years) and ABN Amro (4 years). He is experienced across regions including Australia, New Zealand, Pan Asia and most recently having lead the expansion and coordination of the Global Material and Energy products at Macquarie. Andrew is interested in all things Asian – particularly the food!
Prior to co-founding ECP, Jared was part of the Hyperion Investment team until 2012. In addition, Jared spent some time seconded to Wasatch Advisors in Salt Lake City. Prior to his time in financial services, Jared consulted on a number of IT projects. He has continued to be involved in the entrepreneurship space, regularly giving lectures to Students on Tech Investment and Entrepreneurship. Jared balances out all this left-brain activity, with Yoga, Meditation and Mindfulness.
Sam is a CFA Charterholder. Prior to joining the team at ECP, Sam spent 8 years at Bell Potter Securities as a Small Caps Research Analyst. While Sam's coverage was generalist his focus has been on industrial and cyclical companies. When Sam’s not crunching numbers you can find him skydiving, skiing or surfing!
Damon is a CFA Charterholder and holds a Bachelors of Commerce degree at UNSW. His career commenced in equity research at various Investment Banks including Nomura and J.P. Morgan, covering Small Caps, Telecommunications and Media. He then worked at Fidelity International until 2017, covering Property, Mining, Energy and Utilities. Damon also has some secret carpentry skills that he puts to work in his down-time!
Jason holds a B.Com, LLB. He completed a clerkship at Ashurst, focusing on Corporate Law. He is admitted as a legal practitioner in the Supreme Court of NSW. Picking investments is like picking wine and in another life Jason would be a Sommelier!
All figures as at 30 April 2022
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