The Lennox Capital Partners managed fund provides investors with exposure to a portfolio of between 20 and 40 actively managed, style-agnostic microcap equities. It aims to identify companies with compelling medium-term valuations it believes will outperform. Celebrating the 3 year anniversary of the Fund, since inception it has delivered an active return of 11.86% p.a.* after fees as at 31 January 2021.

Lennox Capital Partners Principal and Portfolio Manager James Dougherty said the addition to BT Wrap and BT Panorama platforms capped a very strong year for the Fund, despite difficult conditions.

“We are pleased to bring the Lennox Australian Microcap Fund to the thousands of Australian investors and financial advisers who use the BT Panorama and BT Wrap platforms”.

“The fundamental analysis and in-depth research underpinning our microcap strategy has provided investors with outstanding returns, and we’re excited to be able to bring those benefits to a greater number of Australians,” he said.

The Fund is rated Highly Recommended by Lonsec^[1] and Recommended by Zenith^[2]. Lennox Capital Partners is supported by Challenger Limited subsidiary Fidante Partners, which forms long term alliances with talented investment teams to support and grow specialist investment management businesses.

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[1] The rating issued August 2020 for Lennox Australian Microcap Fund is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2020 Lonsec. All rights reserved.
[2] The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (assigned February 2020 – Lennox Australian Microcap Fund) referred to in this document is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at http://www.zenithpartners.com.au/RegulatoryGuidelines

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In addition, Lonsec has given the Lennox Australian Microcap Fund, which was launched last year, a ‘Recommended’ rating.

Lennox is run and majority owned by principals and portfolio managers James Dougherty and Liam Donohue in conjunction with Fidante Partners, a boutique funds management business and division of Challenger Limited.

In its rating report, Lonsec described the investment team of Mr Dougherty, Mr Donohue and analyst Olivia Bible as ‘high quality’ and strongly aligned to the interests of investors and noted their investment process was well-structured and repeatable.

“Lonsec has very high conviction the financial product can generate risk-adjusted returns in line with relevant objectives. The financial product is considered a preferred entry point to this asset class or strategy,” the report stated.

The Lennox Australian Small Companies Fund provides investors with exposure to a high-quality portfolio of Australian smaller companies. Lennox employs a fundamental bottom-up research effort seeking to identify securities that have been mispriced by the market.

The Fund aims to hold between 20 to 40 stocks and has returned 14.07% p.a. net of fees, as at 31 January 2019, since its inception in April 2017. This is 6.16% more than the S&P/ASX Small Ordinaries Accumulation Index over the same period.

Mr Dougherty said Lennox was delighted to receive such strong recognition from Lonsec. “The Lennox Australian Small Companies Fund inflows are gaining momentum and we are confident the newer Lennox Australian Microcap Fund will also flourish under the same investment approach”, he said.

The Lennox Australian Microcap Fund is an actively managed, style-agnostic portfolio investing in a broad range of microcap equities. The fund’s objective is to identify companies with compelling medium-term valuations and low short-term risk to earnings.

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Lennox was established in May 2017 by James Dougherty and Liam Donohue in conjunction with Fidante Partners, the boutique funds management business of Challenger Limited. The Lennox Australian Small Companies Fund has returned more than 26% net of fees  since its inception.

The Lennox Australian Microcap Fund is an actively managed, style-agnostic portfolio investing in a broad range of microcap equities. The fund’s objective is to identify companies with compelling medium-term valuations and minimal short term risk to earnings.

It aims to outperform the benchmark S&P/ASX Small Ordinaries Accumulation Index by owning between 20 and 40 Australian and New Zealand-listed securities (primarily outside the S&P/ASX 200 index).

Mr Donohue said the formation of the new fund was driven by growing investor demand and a desire to seize opportunities in the microcap segment of the market.

“What you find at the microcap and small-cap end of the universe is that some companies are under-researched, so there is plenty of new information to discover and significant opportunities available if you’re willing to do the work”.

Mr Dougherty said the impacts of change within sectors were quite often miscalculated by equity markets in the short term.

“That could be structural change such as technological innovation; it could be cyclical change within an economy; or company specific change. We believe that the information that comes out of that change is processed inefficiently by equity markets and therefore creates mispricing and opportunities for active managers such as ourselves.

“Our strategy for the microcap fund follows the same structured and repeatable process as our small companies fund, with an emphasis on risk management, which is crucial for success in this volatile sector of the market. Our investment philosophy leads us to invest in well-managed, well-governed companies that have forecastable earnings,” he said.

Prior to founding Lennox, Mr Dougherty and Mr Donohue were long-time portfolio managers of the Macquarie Australia Small Company and Microcap funds, which consistently delivered top quartile performance.

Since inception to 31 January 2018, the Lennox Australian Small Companies Fund delivered a net return of 26.41%, 8.48% above the benchmark S&P/ASX Small Ordinaries Accumulation Index.

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Lennox was established in March this year by James Dougherty and Liam Donohue, who are the majority owners, in conjunction with Fidante Partners, a boutique funds management business and division of Challenger Limited.

Prior to founding Lennox, Dougherty and Donohue were long-time portfolio managers of the Macquarie Australia Small Company and Micro-cap funds, which consistently delivered top quartile performance compared to peers.

In its rating report, Zenith said it had “a high regard for the senior members of the investment team given their experience and track record of out-performance” and noted Dougherty and Donohue’s working relationship reduced risks usually associated with a start-up investment boutique.

Dougherty said Lennox was delighted to receive such support from Zenith, especially as its Australian Small Companies Fund was only launched in May. “We have received a strong level of interest since the launch and with this rating hope to maintain that momentum,” he said.

The Lennox Australian Small Companies Fund provides investors with exposure to a high-quality portfolio of Australian smaller companies. Lennox employs a fundamental bottom-up research effort seeking to identify securities that have been mispriced by the market. The Fund aims to hold between 20 to 40 stocks.

The Zenith rating comes after the team recently hired lead analyst Olivia Bible from Moelis & Company, where she specialised in small to mid-sized companies with a consumer discretionary focus. Prior to this Olivia held analyst roles at J.P. Morgan and Bank of America Merrill Lynch.

In the first four months since inception (1 May 2017) the Fund has delivered a total return of 9.36% (after fees) since inception compared to the Small Ordinaries benchmark that has returned 2.96%.

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Ms. Bible brings more than five years’ experience in finance and equity research to the role.

She joins Lennox from Moelis & Company where she was a lead analyst in the equities research team, specialising in small to mid-sized companies with a consumer discretionary focus. During her time at Moelis she advised Australian and international institutional equity investors on equity investments and published indepth
research on companies and sectors.

Prior to that she held analyst roles at companies including J.P. Morgan and Bank of America Merrill Lynch.

Ms. Bible will work closely with the Lennox founders and portfolio managers James Dougherty and Liam Donohue.

Commenting on the appointment, Mr. Dougherty said: “We are delighted to welcome Olivia to the team. She brings an in-depth understanding of the small cap sector and her strong analytical and research skills make her a valuable addition to our team.

“We have received a very strong level interest since the launch of our flagship smallcap strategy,” he added.

Launched in May 2017, the fund has outperformed its benchmark S&P/ASX Small Ordinaries Accumulation Index by 3.4% during its first month in the market.

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Established in March 2017, Lennox Capital Partners is majority owned by founding principals, James Dougherty and Liam Donohue. The pair had both worked at Macquarie for over a decade, managing the successful Macquarie Australian Small Companies Fund since January 2012. It is the latest boutique investment manager to be announced under Fidante Partners, the boutique funds arm of Challenger Limited.

The Fund will be seeded by the founders and Third Link Growth Fund, an Australian fund of funds founded by industry veteran Chris Cuffe.

Commenting on the launch, Mr. Dougherty and Mr. Donohue said they were excited to be bringing the new Fund to market.

“Investing in Australian small caps can offer the potential for strong returns from high quality and fast growing companies, in addition to diversification from traditional index heavy weights. Our flagship small cap strategy offers long term investors a great opportunity to benefit from this vibrant and growing part of the Australian economy,” said Mr. Donohue.

Mr. Dougherty continued: “Our structured process and focus on company quality have enabled us to successfully identify compelling small cap investment opportunities over a long time period.

“We invest in businesses with earnings that are forecastable and real. This  approach aims to protect investors from the volatility associated with small companies while capturing the strong returns that are available in this segment of the equity market.”

Lennox Capital Partners’ active bottom-up approach to investing utilises both qualitative screening and in-depth fundamental research to identify investment opportunities. The investment process includes rigorous, deep-dive research ‘on the ground’.

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