For the past year Acorn Capital has been trying to launch a pre-IPO fund investing in Australian companies just before they join its familiar microcap universe.
While a number of institutional clients have shown interest, the fund is yet to secure a single signature as markets have continued their journey south. “It has not been easy,” admitted portfolio manager, Douglas Loh. “We have been talking to investors, and I would like to say that we are quietly confident, but in this market it is hard to tell because one minute you can think you have (secured funds under management), but then the next minute you haven’t.”
The idea for the fund would be to initially invest in listed microcap stocks, and as better or cheaper alternatives in the unlisted area became available, the fund would switch its investment across into the unlisted companies, providing a blend of listed and unlisted holdings. Loh said Acorn would set up the fund as a long-term investment, as it had done in the listed space. “The whole idea is to back good management in good businesses,” he said.