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Grandeur Peak Funds 2Q Commentary and New Funds Launch Info

Latest commentary on 2Q results and discussion on upcoming funds.

Global Micro Cap will have a capacity of $25M. It sounds like it will close on its first day of business which will be by the end of year. Fund will focus on companies between $50M - $350M. Fund will be offered to existing GP fundholders first. Maybe they ought to implement a lottery system to purchase fund shares on its first day of trading:)


  • They're only going to offer Global Micro Cap to existing investors and only for direct purchases. I wonder how they will know, since I have GPIOX in my brokerage account, that I am an existing investor? Maybe David Snowball could shoot them an email to ask if there will be some mechanism for that, or if I'd have to shift my current holdings to a direct account with them in order to invest in Global Micro Cap...
  • I'm in the same boat as you. I don't hold my GP funds directly with them.
  • I wonder if I can leave a standing order to transfer funds in for whenever the fund finally opens. I'll send them an email.
  • Where (i.e., which page) does the Quarterly Report state that the Global Microcap fund will be offered to existing shareholders first?
    And I thought it was interesting seeing their chart showing what percentage of each of the existing funds is devoted currently to microcaps.
  • Bottom of page 4, "Capacity section", indicates that Global Micro Cap only open to existing shareholders. On page 6 states only offering Global Micro Cap in institutional shares and direct purchase only.
  • I'll send an email to ask if I need to transfer my current holdings to them for them to know I'm a current shareholder. Will report back if I get a response.
  • They do not allow for standing orders.
  • edited July 2015
    I own no pure micro-cap funds (other than GPGOX), but if I were interested, this is the team I would feel comfortable managing that investment.

    If the fund would have a ceiling on market cap, as it states that it would, I wonder what the firm might forecast as possible turnover as this may drive a decision on taxable versus non-taxable account. GPGOX turnover of 37% as stated by M* is not overly burdensome.
  • Yeah, I've already asked about the standing order. I wanted to open an account, put money in it and invest on the first day Global Micro Cap becomes available. They won't do it and they said I'd have to fax my application on day 1 and they would give me the day 1 price even though the money might not arrive on day 1. Like others, all my investments so far have been through my broker.
  • edited July 2015
    If I had any GP held at a brokerage, I would transfer them to GP's transfer agent and get your name on their agent's records. When I opened two of my accounts with them, I just telephoned them and told them what account to setup and to use my bank account on record to fund my purchase. It was a very simple process once you have established an account/relationship with them.

    I am curious why the micro cap opening will be around year-end, probably after the holidays, when people don't have any money? Possibly to limit the inflows?
  • I doubt flows will be much of an issue for the Micro fund. Retail world isn't going to be dominating this one at all, I wouldn't think. I'm assuming there is a large institutional client that will be providing a nice chunk of money for the fund.

    Any idea why GP would launch a fund that will close @ just $25 million? I know the fee is pretty hefty, but will it even generate enough in fees to cover the costs of running it or will this fund essentially break even? Also, would you not expect the Global Stalwarts fund to have slightly lower fees since there is U.S. exposure?

    Anyways, I'll be watching the launch like a hawk and am very excited that I will be able to invest some more capital with these guys (invested in EM Opps). IMO, one of the best shops around. I'll be allocating to Global Stalwarts. Just hope that these funds stay open a little longer since they are SMid and thus liquidity is less of an issue.
  • One of the things I've been pondering over the past few weeks is how my foreign holdings could be impacted by the suspension on the Chinese exchanges.

    Not to be overlooked in the GP letter is this:

    "It’s worth noting that while trading of about 21% of the market cap of the Shanghai and
    Shenzhen stock exchanges has been halted, none of our holdings trade on those exchanges nor have been halted".


  • Investments into the Global Micro-Cap fund will be capped at $100,000.00 per investor. The institutional minimum will be waived to $2,000.00.
  • edited July 2015
    I got this email response, when I asked if I needed to transfer from current holdings from my broker to be counted as a current investor:

    "Thank you for contacting the Grandeur Peak Funds. You do not need to transfer your funds. You can open an account with us once the fund launches and purchase it directly through us."

    Edit: On a follow-up, they said the thing to do is fax the relevant page of my brokerage statement, showing ownership of one of their funds, along with my application to open an account with them, the day the fund launches.
  • Do any of you remember the opening of PBHG Limited back in the late 90's? That was a microcap fund that was open for all of one day and took in roughly $100MM on opening day. The fund never lived up to its hype. Will history repeat itself?
  • edited July 2015

    Similar to when Wasatch opened the Microcap Value and International Opportunities Funds years ago also.
  • Shadow,

    GP was pretty clear in terms of the continuum of market cap offerings, and relationships for all of their funds within their control. They were pretty clear also where the micro-cap offering fell within that plan.

    Is there a corollary within the Wasatch or PBHG experiences which would raise a red flag other than simply they carved a niche for a new fund?

  • International/Global Stalwarts looks interesting, and perhaps they'll stay open a little while longer because of the slightly larger size. Honestly with the microcap fund, this might go small enough that it compounds in the high teens especially since it won't make it past 25 million.

    Their funds have done well over the past few years, but with hundreds of holdings, it's hard to believe there are that many attractive companies, despite the universe of stocks they choose from. I'd love to see a focus fund with almost no turnover should they launch something after these three.

    I didn't pull the trigger last time on gpiox, but I could definitely consider these for part of my foreign allocation.
  • I have been in GPIOX, GPGOX, and GPEOX from inception. Reading the latest report shows considerable overlap among the three funds. I'm wondering how the new funds are going to differentiate themselves from the current ones. I realize the guys say there are more than 25,000 companies to choose from, but how many stocks can a team of analysts really get to know? Can't help feeling as though the old funds are chopped liver and the new ones will have attention lavished on them.
  • edited July 2015
    Here is an article from when Blake and Gardiner were at Wasatch and the problems Wasatch encountered when the Micro-Cap Value was offered and the steps taken to resolve those problems when the International Opportunities was offered.

    Their past may provide some insight to the future of the Global Micro Cap Fund offering.

  • My understanding is that the new funds (like the 3 you own) are going to essentially be carve outs of the Global Reach fund. The Micro cap fund is an exception as there may be some newer/different holdings in that fund. The Stalwarts family of funds is just going to be the companies that the team would classify as "Stalwarts" and not include the Fallen Angels and BICGs... The team's research efforts aren't really going to expand beyond what they are already looking at. It really can't much because they're "Global Small Cap Specialists."

  • Shadow,

    Interesting article concerning Wasatch. The fund that was profiled (WAIOX) was to be capped at $20 million at the fund has $462 million in aum, an expense ratio of 2.25%, and is open to new investments.
  • That was also nearly 11 years ago... Liquidity in these markets is much different today.
  • JoJo26 said:

    That was also nearly 11 years ago... Liquidity in these markets is much different today.

    As are the number of golden geese Wasatch has left:)

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