We look to embrace the natural market volatility of markets instead of trying to artificially smooth it out, taking concentrated bets in our high conviction ideas.
We believe the growing differences between “investing” and the “investment business” have created an opportunity for smaller, more agile investment decision makers, who are willing to exploit opportunities with asymmetric upside potential.
In Australia, many institutional investors have become so large that it makes little sense for them to allocate to fund managers specialising in small-listed opportunities. Added to that, the increasing costs of setting up a fund means the number of new fund managers focusing on micro-cap and small-cap opportunities is decreasing compared to previous periods. We feel this offers the potential for alpha to managers looking to invest in the smaller end of the market that’s currently under researched and under owned.
Some managers brand themselves as pureplay “growth” or “value” managers however this is not our approach. Our ambition is not to create fees, but to grow our FUM through capital appreciation in a variety of market conditions. A significant portion of the FUM is our own capital not leaving us the opportunity to diversify elsewhere. Hence when the macro conditions change, so will the opportunities we look to invest in. We’re focused on maintaining flexibility and continuing to evolve in a rapidly changing world.
Cerutty Macro Fund is a long only equities fund. Our ideas start with top-down, macro-economic themes, analysing where we are in the business cycle, before finding the best bottom-up ideas to express our views. We have a bias to micro-cap and small-cap Australian equities, however if liquidity conditions are tight, we’ll express our views through larger cap positions. Where we can’t find appropriate opportunities to execute our high conviction views on the ASX we’ll look to do so through overseas equities.
We want to embrace a different investment framework to many institutional investors, one of first principles, as opposed to relative performance of stocks vs the index where earning fees is the primary focus.
The Cerutty Macro Fund portfolio will be highly concentrated (between 15-40 positions) and more volatile than many strategies. Macro investing is often lumpy as the timeline between expressing an idea and it coming to fruition can be hard to predict. The Cerutty Macro Fund is only available to wholesale investors and isn’t suitable for investors uncomfortable with high levels of volatility. But we believe the greatest rewards in investing and in life are reserved for those willing to endure short term discomfort in pursuit of a longer-term goal and for people willing to be different from the crowd.
Thanks for coming to our website and taking the time to look at the Cerutty Macro Fund.
Director and Portfolio Manager
- Identify long term secular macro trends.
- Analyse where we are in the business cycle.
- Conduct extensive due diligence to find the best stocks to express our views.
- When liquidity conditions are high, leverage our strong broker relationships to gain access to micro-cap raisings or crossings.