Time Binsted

NovaPort Capital, a boutique Australian equities investment manager specialising in ASX-listed small and microcap companies, has appointed Tim Binsted as Portfolio Manager.

Alex Milton, NovaPort Principal and Co-Portfolio Manager, said Mr Binsted’s progression to senior analyst and now promotion to Portfolio Manager is a reflection of his strong stock picking skills and contribution to the portfolio construction process.

“This promotion reflects Tim’s rapid progression since joining NovaPort four years ago. He has become a proactive and valued contributor to stock discussions beyond companies under his purview as well as participating in the portfolio construction process,” Mr Milton said.

Binsted will be responsible for investment research and capital allocation for the NovaPort Smaller Companies Fund and NovaPort Microcap Fund.

The performance of both funds has been strong over the long term, with the NovaPort Smaller Companies Fund delivering 11.35% (after fees) and the NovaPort Microcap Fund delivering 8.16% p.a. since inception. The NovaPort Microcap Fund recently celebrated its 18-year anniversary while the NovaPort Smaller Companies fund has a track record of over 20 years.

Mr Binsted joined NovaPort as an analyst in 2019. Studying Arts at University and beginning his career as a journalist at the Australian Financial Review before embarking on a career in investment management, Mr Binsted acknowledged his pathway was non-traditional, but said different perspectives are useful when hunting quality in a competitive small cap market.

“I have always had a passion and interest in finance. With family working in the industry, I had an early interest in what drives companies and share prices. I think that having a different background does emphasise other skills, which helps to spot undervalued stocks and deliver returns for our investors,” Mr Binsted said.

The small cap risk and reward

NovaPort Capital believes elevated uncertainty in markets and the global economy creates opportunity for small and microcap investors who focus on buying quality companies with longterm growth potential.

There is significant opportunity to buy quality at attractive prices, as investors tend to overlook and underappreciate the value of small and microcap companies. It is easier to find hidden gems when fewer people are looking,” Mr Binsted added.

The current inflationary environment has made active management critical to mitigate risk and deliver returns, and this is particularly the case in the Small Ordinaries Benchmark, which can at times become dominated by speculative companies.

“The risk of passive investing is tracking a Benchmark, which may be exposed to over-inflated companies or sectors. We saw this with Buy-Now-Pay-Later stocks and unprofitable tech stocks, for example.

“This risk is intensified in the small and microcap market, which requires active focus on company fundamentals and sustainable businesses over superficially cheap stocks or market hype.

“The current market undoubtedly presents opportunities for small and microcap investors,” Mr Binsted said.

NovaPort Capital is part of Fidante, a global investment management business which forms long term alliances with best-in-class investment managers. As Portfolio Manager, Tim works alongside Co-Portfolio Managers and Principals Sinclair Currie and Alex Milton.

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During its latest review, Lonsec has upgraded the NovaPort Microcap Fund from ‘Recommended’ to ‘Highly Recommended’. For the fourth consecutive year, it has retained a ‘Highly Recommended’ rating for its Wholesale Smaller Companies Fund.

Both funds are managed by NovaPort’s co-portfolio management team of Alex Milton and Sinclair Currie, who began working together in September 2010 and have over 40 years’ combined industry experience. In the recent review, Lonsec said it considers the co-PM team to be among the most impressive in the small cap sectors.

The performance of the funds has been strong over the long term, with the Wholesale Smaller Companies Fund delivering 12.2% p.a. (after fees) over the five year period to February 2017 realising excess returns of 10.4% p.a. versus the benchmark and the MicroCap Fund generating 11.4% p.a. after fees over the same period (9.6% p.a. above index).

NovaPort targets companies with potential for 50% upside over three years in a concentrated portfolio, using a high-conviction, benchmark-unaware strategy.

Mr Milton said the rating highlighted both funds’ ability to offer investors the benefits of diversification while also improving long-term returns.

“We are pleased to have both funds recognised for generating quality returns. Investors are seeking capital growth at relatively low risk in a market characterised by low rates and investor portfolios dominated by blue-chip large caps. And we find smaller companies with real long term growth opportunities will continue to deliver some exciting performance for investors regardless of broad economic volatility.

“Our bottom-up, long-term approach is the key to identifying star performers that will meet and exceed expectations. Well managed, quality small caps are well positioned to exploit new and expanding markets and NovaPort favours stock with a number of common elements – sound balance sheets, strong management, favourable industry position and innovative, and differentiated products to meet market demand,” Mr Milton said.

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