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
http://www.grandeurpeakglobal.com/documents/pdfs/grandeurpeakglobalfunds-comm-20150630.pdf
Comments
And I thought it was interesting seeing their chart showing what percentage of each of the existing funds is devoted currently to microcaps.
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.
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?
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.
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".
Interesting.
press
"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.
Similar to when Wasatch opened the Microcap Value and International Opportunities Funds years ago also.
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?
press
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.
Their past may provide some insight to the future of the Global Micro Cap Fund offering.
http://articles.baltimoresun.com/2004-11-07/business/0411060187_1_mutual-funds-closed-funds-international-opportunities
Shadow,
Interesting article concerning Wasatch. The fund that was profiled (WAIOX) was to be capped at $20 million at inception...today the fund has $462 million in aum, an expense ratio of 2.25%, and is open to new investments.