The Paradice global small-mid cap capability will initally be capped at US$300 million, a fraction of what Beck’s Artisan fund was managing, allowing him to drill deeper for value in the sector.

“When you get a big macro dislocation, small caps tend to get thrown out with the bathwater…as contrarian investors we’re trying to buy assets at 60 cents on the dollar, which is easier said than done, but we are finding a lot of fantastic, nichey little franchise businesses out there at the moment, with great management, assymetric risk through having little financial leverage, and attractive valuations,” Beck said.

Each member of the US team will spend two weeks in Denver followed by two weeks travelling, with Beck singling out Japanese and US mid-small caps as currently being cheap, and even mentioning there were a couple of good Greek companies being unfairly punished by that country’s macroeconomic travails. The portfolio will hold 50 to 70 stocks at any one time, a level of concentration which Paradice agreed fit the ‘absolute return’ tag.

Paradice said his Australian employees would benefit from the information crossover with the Denver team, as well as the opportunity it gave them to spend time working in the US.