Otus Smaller Companies UCITS Fund

The Maga Smaller Companies fund launched in UCITS format in January 2015 and is managed by Andrew Gibbs (lead PM) and Roberto Casoni. The fund’s investment philosophy combines long-term bottom-up fundamental stock selection with shorter-term top down risk management into a European equity long short strategy. The managers spend the vast majority of their time (80%) seeing and analysing companies, those who are often overlooked by market participants. These are either ‘established’ smaller companies which are on a journey of growth (exposed to secular growth trends), which have managements with proven track record, solid capital structure (i.e. they have the financial capacity to deliver on their ambitions), defined moat or market shares; or companies in cyclical industries where the investment team has identified a clear inflation point in their cycle. The top down risk overlay aims to preserve capital in period of distress and is informed by companies meetings (e.g. order backlogs, capacity utilisation levels, inventory levels), resulting in a truly variable net market exposure proposition (the idea is to align the fund’s net exposure range to the economic/credit cycle). This is primarily achieved via single stock shorting and occasionally via index futures or options. The final portfolio is relatively concentrated, with 35-50 names (long and short).