Already a subscriber?In the eight years since Collins St Asset Management was founded, its chief investment officer Vasilios Piperoglou can only recall two occasions when a thematic has presented itself with enough “significant asymmetry” to justify a major investment.
“At some stage, investors are going to get smacked in the face … there will be a moment within months, not years, where people wake up and these quality small caps will multibag.”A multibagger is every investor’s dream – a stock that at least doubles in value. And while the best chance of finding one is at the smaller end of the market, those companies also present the highest risk.
Its strong run of form has continued over the past nine months, with the fund returning 18.6 per cent, net of fees, in the financial year to date, beating the S&P/ASX 200’s 7.6 per cent gain over the same period.which is targeting the local and international small-cap gold sector following strong demand from clients. The firm believes that miners in North America are also looking cheap, particularly small- and mid-cap companies in Canada and the US.
The value fund also benefited from a 60 per cent surge in Link shares in December following a $1.2 billion buyout offer from Japanese financial services company Mitsubishi UFJ Financial Group. The bid ended a rollercoaster ride for shareholders over the past three years, when four other suitors attempted takeovers.
Piperoglou admits that Collins St has still lost money on that investment, adding that if the fund hadn’t bought shares in Link, its two-year return would be at least 5 per cent higher.Collins St is also bullish on energy, particularly oil and gas, and believes that they will be crucial for decades to come as the world transitions towards renewable energy.