Seneca Australian Small Companies Fund
A portfolio of 20-50 sufficiently liquid, small and mid-cap ASX-listed companies, with a preference for high quality, profitable and growth focused businesses.
The Seneca Australian Small Companies Fund is an actively managed investment fund targeting superior returns relative to the S&P/ASX Small Ordinaries Index. The fund employs a disciplined, bottom-up investment approach, focusing on high-quality, growth-oriented small and mid-cap Australian companies.
The investment team seeks companies with strong balance sheets, sustainable competitive advantages, and large, growing addressable markets. By combining rigorous fundamental analysis with technical insights, the fund aims to identify undervalued opportunities with significant upside potential. The fund's investment philosophy emphasizes alignment with shareholder interests, strong corporate governance, and a focus on long-term value creation.
‘Seneca Australian Small Companies Fund’ (the Fund) is a relative return fund, benchmarked to the S&P/ASX Small Ordinaries Index. The Fund’s goal is to deliver annual positive relative returns and to outperform the benchmark after fees.
The Fund aims to meet these objectives through fundamental, bottom-up valuation and analysis of each of the individual portfolio constituents. Our preference is for growth companies with strong balance sheets, sustainable competitive advantage and large, growing addressable markets.
Targeted Returns
The Fund aims to outperform the benchmark S&P/ASX Small Ordinaries (Total Return) Index by +3% on an annual basis. The Investment Manager gives no guarantee or assurance as to the performance of the Fund, the repayment of capital or any particular rate of capital or income return.
We will construct a portfolio of 20-50 sufficiently liquid, small and mid-cap, ASX-listed companies, with a preference for high quality, profitable and growth-focused businesses. The fund is long-only, will not utilise any derivatives or leverage and be able to hold up to 50% cash at the discretion of the manager.
We are an active, bottom-up, fundamental investment manager who seeks to understand the key drivers of revenue, cost, and profit growth for each of our portfolio companies. We have a distinct preference for investing in structurally supported growth industries and with management teams that are founder-led and/or highly aligned with shareholders’ interests.
Alignment: management alignment with shareholders is important to generating shareholder returns, especially in small companies that are less diversified. We seek to invest in companies where management demonstrates alignment with shareholders via meaningful equity ownership and/or incentive structures tilted towards total shareholder returns. Good governance is similarly an important in our Environmental, Social and Governance (ESG)
framework.
Quality: quality filters are important in narrowing down our investable universe. We favour companies with strong, preferably net cash balance sheets or those where robust and predictable earnings streams can manage gearing levels. At a sector level, we are seeking favourable industry structures where a company can carve out and grow market share reliably and establish a competitive advantage. At a security level, we are looking for companies with strong cash flow and return on capital.
Growth: we invest in companies with growing earnings where we can forecast earnings with a reasonable degree of confidence. This typically leads us to structurally supported growth industries or inflecting cyclical trends.
Value: consistent with delivering capital growth for investors, we are disciplined to invest at the right price, so valuation metrics are an important aspect of our investment process. We see value as a two-part equation where a security must be both fundamentally undervalued and have a catalyst to realise this value.
Our combination of top-down macroeconomic research with in-depth bottom-up stock analysis gives us insights into the earnings profile of our universe of companies during the various stages of the economic/investment cycle. We combine this fundamental analysis with technical analysis to identify entry / exit levels and shifts in investor sentiment.
We seek to position our portfolio towards more established, profitable, high return, modestly geared small companies who have the capacity to grow organically and/or via acquisition. These businesses often exhibit above average cash flow, earnings growth, earnings stability and sometimes pay dividends at higher rates relative to the average company in our universe. At any time, our portfolio will be tilted toward stocks with the highest expected return, based on our analysis and estimates.
The Investment Manager is an active, bottom-up, fundamental investment manager who seeks to understand the key drivers of revenue, cost, and profit growth for each of our portfolio companies. They have a distinct preference for investing in structurally supported growth industries and with management teams that are founder-led and/or highly aligned with shareholders’ interests. Their combination of top-down macroeconomic research with indepth bottom-up stock analysis gives them insights into the earnings profile of their universe of companies during the various stages of the economic/investment cycle. They combine this fundamental analysis with technical analysis to identify entry / exit levels and shifts in investor sentiment.
They seek to position their portfolio towards more established, profitable, high return, modestly geared small companies who have the capacity to grow organically and/or via acquisition.
These businesses often exhibit above average cash flow, earnings growth, earnings stability and sometimes pay dividends at higher rates relative to the average company in their universe. At any time, their portfolio will be tilted toward stocks with the highest expected return, based on their analysis and estimates.
Seneca is a boutique investment management and private wealth advisory. We are a diverse team of experienced and highly educated professionals, responsible for the stewardship of over A$300 million, that has been entrusted to us by our clientele of high-net-worth families, successful private business owners, ambitious professionals, and discerning family offices.
Our History
Seneca was founded in 2016 by Luke Laretive, John Baillie, and Victoria Schepisi.
After decades working for large institutions, we became frustrated with the bloated cost structures, the archaic technology and the politics of navigating organisations that were inherently conflicted with the expectations and objectives of our clientele.
We designed our business from the ground up. The blank canvas allowed us to source best-in-class access to investment research, combine it with the latest technology solutions and deliver a level of excellence and personalisation not previously possible.
Since then, the company has grown to 10 staff, over $300m in funds under advice, 6 existing investment products and recently added a new regionally focused office in Bendigo, Victoria.
Luke started his career as a Compensation Analyst at Deutsche Bank in London, before transitioning to the mining industry where he worked for Vale, marketing their metallurgical and thermal coal products to customers around the world. At Vale, Luke was also responsible for price forecasting, supply/demand modelling and trading strategy.
Leaning heavily on his practical work experience, Luke is responsible for portfolio construction, stock selection and risk management in the Seneca Australian Small Companies Fund.
Luke holds a Master’s degree in Applied Finance from Monash University as well as a Bachelor of Commerce from The University of Western Australia. He is a level 2 accredited derivatives advisor and co-founder of Seneca.
Ben Richards has several years of diverse financial services experience in his relatively short career. Most recently, Ben worked as an investment analyst at a small cap fund manager focused on the Australian market. Ben was responsible for research coverage across the small caps sector and performing fund investment due diligence in the listed and unlisted space. Prior to this, Ben worked at Evans & Partners in analytical and support functions.
Ben holds a Bachelor of Commerce from the University of Melbourne, with Honours in Finance.
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Yes. Seneca is authorised to advise Wholesale and Retail Clients.
Wholesale Investors comprise of Sophisticated Investors and Professional Investors under section 761G of the Corporations Act 2001.
A Sophisticated Investor is a person with a certificate from a qualified accountant certifying they have a prescribed net asset or gross income level. This gives them an exemption under the Corporations Act 2001. That means they can buy financial products without a regulated disclosure document such as a prospectus or product disclosure statement.
A person holding a certificate is a:
‘Sophisticated investor’ for the purposes of Chapter 6D (if offered debt or shares), or ‘Wholesale Client’ for the purposes of Chapter 7 (if offered a financial product, other than insurance, superannuation or a retirement savings account product or service) and the financial product is not used in connection with a business:
To be eligible for a certificate, you must have:
- a gross income of $250,000 or more per year in each of the previous two years, or
- net assets of at least $2.5 million (reg 6D.2.03 and reg 7.1.28)
Source: Moneysmart
If you’d like to access the benefits of being treated as a Wholesale Investor, please discuss this with your adviser.
We can offer some of our services for investors with as little as $25,000.
Expertise and Knowledge
Seneca advisers have an in-depth understanding of the Australian and global financial markets. They are trained to assess the performance of different investment types, and they can provide informed advice on the best opportunities and assist you in managing risk through professional portfolio management and diversification.
Access to Information
Our advisers have access to a broad range of research and data not readily available to individual investors. This includes regular briefings from company management teams, advanced analytical tools, Seneca’s in-house research analysts and broker research from across the market. They use this information to make informed decisions and give their clients an edge in the market.
Timesaving
Researching, monitoring, and managing investments can be time-consuming. Cutting through the noise and bias of newspapers, social media and forums, a Seneca adviser can bring you a curated range of opportunities and give you more time for the things you enjoy.
Emotional Buffer
Investing can be stressful, especially during times of market volatility. Having an experienced, expert adviser can provide you with the information and data you need to help prevent emotional decision-making that might negatively impact your investment outcomes.
A Separately Managed Account (SMA) is managed by professional investment firms and gives the investor (client) direct ownership of the securities in the portfolio. This is different from a managed fund where the investor owns units in the fund but not the underlying assets.
SMAs provide benefits such as transparency, tax efficiency, and customisation. You can view the individual securities in your account, you can customise the account to avoid certain securities or sectors, and you can manage your tax position independently.
An SMA brings together many of the benefits of direct share ownership, with the performance and convenience of a professionally managed fund.
In summary, the key distinguishing features are:
Ownership: With both a HIN and an SMA, you have direct ownership of the securities. In a managed fund, you own units in the fund, not the underlying securities.
Management: An SMA is managed by a professional investment firm on your behalf. When you own shares on a HIN, you are responsible for all investment decisions and management. In a managed fund, a fund manager makes investment decisions on behalf of all unit holders.
Customisation: SMAs can offer a degree of customisation in line with your preferences, while this is not possible with a HIN (unless you manage your investments to reflect these preferences yourself) or in a managed fund.
Tax Considerations: SMAs may provide more opportunities for tax optimisation compared to managed funds due to the direct ownership of securities.
It varies depending on what advice and services you require.
You should refer to the Financial Services Guide (FSG) for more important information.
Our clients benefit from professionally managed, diversified portfolios, invested across:
- Australian Equities
- International Equities
- Property & Infrastructure Securities
- Term deposits
- Government, Corporate Bonds
- Hybrid Securities, Preference Shares
- Agriculture, Private Credit, Unlisted Property/Infrastructure
- Private Equity, Pre-IPO and Venture Capital
- Absolute Return Strategies, Hedge Funds and Multi-Strategy Funds
- Exchange traded options, warrants and other derivative securities
- Exchange traded funds (ETF’s)
Yes, we source deal flow from across the market on a daily basis. Due to long-standing relationships with corporate advisers and bankers, and our reputation as reliable, long-term investors, our clients have often benefitted from exceptional access and allocations.
Yes, both direct and through our actively managed Global Equity SMA.
As your investments are held in your own discrete investment portfolio, we can tailor your investment strategy to include your ethical preferences including selecting from a range of specialist ESG-focused managed funds from around the world and excluding specific sectors or shares from our separately managed accounts (SMA’s).
Statutory Statement
This offer of scheme interests is available to wholesale clients only. This product listing was vetted by and approved by the product issuer identified above before publishing. Investment Markets (Aust) Pty Ltd AFSL 527875 (IM) is not the issuer of the product.
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