Brunel Pension Partnership has launched a global small cap fund, which will manage a mandate of approximately £300 million.
The creation of the fund is in response to client requests for a portfolio offering exposure to the small cap premium as the primary driver of returns.
After evaluating 33 different strategies, three managers – American Century, Montanaro Asset Management and Kempen Capital – were selected. The blended solution gives clients access, within the small cap universe, to a range of market cap exposure, Brunel said.
The pensions pool also worked hard to assess managers on how they would integrate its responsible investment principles and engage with holdings. As a result, each mandate has robust or developing ESG integration and engagement, in an asset class sometimes seen as a laggard in this area, Brunel said.
The fund largely targets investments in developed markets, as defined by inclusion in the MSCI World Small Cap index. The fund’s outperformance target is +2-3%, net of fees.
Matthew Trebilcock, Client Relationship Director at Brunel, said: “The launch of the Global Small Cap fund offers our partner funds access to a different asset class and a different set of growth drivers. Given their long-term horizons, that’s very valuable, both in terms of capturing different opportunities, and of reducing correlation across their portfolios.”