Montreal-based asset management firm Fiera Capital has launched its “all-seasons” small-to-mid cap growth strategy to European institutional and wholesale investors.
This move reflects the growing demand across European markets for exposure to high-growth US equities beyond the S&P 500.
According to the company, the strategy, with a 23-year track record, manages $6.1 billion and has consistently outperformed the Russell 2500 Growth Index. As of March 31, 2024, the fund returned 24.61% over 12 months and 15.25% over three years, providing significant capital appreciation and stability during market downturns.
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Sunil Reddy, the lead portfolio manager, highlighted the potential of small to mid-size companies. “The market tends to underestimate the longer-term opportunity posed by small to mid-size companies,” Reddy said. The portfolio typically holds 60 to 90 names, consisting of companies valued between $150 million and $10 billion at the time of initial purchase. This strategy seeks to deliver significant capital appreciation across multiple market cycles.
The seven-strong team focuses on companies offering innovative solutions to major technological, economic, demographic, regulatory or societal changes. The company shared that themes like cloud computing, e-commerce, AI, and advances in therapeutics provide a strong tailwind for these companies, ensuring ongoing growth.
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Reddy added: “Almost a third of the companies on the index don’t have any earnings, so a passive approach just doesn’t work in the small and mid-cap market. Our highly active approach allows us to avoid these zombie companies and unique risks. More than 85% of our alpha comes from stock picking.”
Klaus Schuster, EMEA CEO, Fiera Capital, commented: “Introducing this strategy to Europe underscores our commitment to providing clients with strategies that elevate portfolio performance. The US SMID Cap strategy complements large-cap equity exposure and offers diversification without additional risk.”
The strategy has an open-ended, publicly available track record via a US ’40 ACT vehicle, and the Ucits format is identical to the existing strategy.
