Acorn Capital Investment Fund

About this Fund

Fund Detail

FUND MANAGER Acorn Capital Limited
INVESTMENT STYLE ACQ invests in listed and unlisted Emerging Companies or microcaps.
INVESTMENT PROFILE ACQ gives investors exposure to companies that have the potential to provide substantial capital appreciation over the long term.
BENCHMARK S&P/ASX Small Ordinaries Accumulation Index
FUND SIZE S&P/ASX Small Ordinaries Accumulation Index
FEES 0.95% p.a.



Benefits of investing in ACQ

Investors in ACQ may benefit in the following ways:

  • Access - The ACQ investment strategy is to supply capital to listed and unlisted Emerging Companies/Microcaps.  This provides access to a capital market that is difficult for individual and SMSF investors to access directly, particularly through a single diversified portfolio.
  • Diversification of portfolio - As at 30 June 2017, approximately 2,000 companies were listed on ASX.  A large or small cap portfolio of companies will only provide access for an investor to the largest few hundred of these companies.  It is estimated that there are over 15,000 non controlled large proprietary or unlisted public companies in Australia.  Investors in ACQ gain exposure to these unlisted and smaller listed company segments, providing diversification benefits to investors who may otherwise find it difficult to gain access to such companies.
  • Support of Australian growth and employment - An investment not only supports companies that innovate, drive productivity and efficiency, but also contributes to Australian growth and employment.
  • Involvement in Australia's funding vehicle for entrepreneurial capital - An investment in ACQ provides exposure to Australia's entrepreneurs and next generation of corporate success stories. Through an investment in ACQ shareholders have the opportunity to "get in early on the stories of growing Australian companies.
  • Experienced and successful senior investment team who can identify the best investment opportunities - ACQ is managed by Acorn Capital, the pioneer of microcap investing in Australia.  An active research-driven investment manager, Acorn Capital's experienced team has a tried and tested active approach of bottom up stock picking as well as sector analysis and thorough valuation techniques that are applied to the assessment of investment opportunities.  The research process is vigorous and regular company interaction is undertaken.
  • Investment in ACQ by management - Directors and staff of both Acorn Capital and ACQ are substantial investors in ACQ.  Investing their own money shows a commitment and capability to follow their mandate.
  • Risk management - Risk and its management is a focus throughout the investment process of ACQ.  The Acorn Capital team manages risk through the creation of diversified portfolios.  In addition, quality of risk systems and reports are managed by an independent audit, risk and compliance committee.  All board members have strong experience in capital markets and corporate governance.
  • Dividends - ACQ intends to pay dividends targeting at least 3% of closing post-tax 30 June NTA for the immediately completed financial year franked to the highest extent possible (subject to sufficient profits and liquidity to facilitate dividend payments).  Information on the latest dividends can be found here.
  • Transparency and ease of investment - As an LIC, ACQ affords an ease of investment and divestment.  Individual investors may provide a buy or sell order via their broker to the ASX as they would any stock.   LICs also offer investors a high degree of transparency, as they are held in a simple structure governed by the ASX's corporate governance and reporting requirements.  LICs are structured to maximize tax effectiveness and frequency of dividend payments with franking credits attached.  LICs are closed end' in nature, meaning they are not forced sellers' to meet the withdrawal demands of investors.
  • Differentiated offering and attractive valuation designed to maximise shareholder returns - ACQ provides access to both listed and unlisted microcaps.  Through ACQ, its shareholders can support both listed and unlisted Emerging Companies. Such an investment, in particular in the unlisted venture capital sector, is not typically available to individual investors.
  • A slice of Venture Capital and Private Equity - traditionally, the focus of Australian Venture Capital has been in Information Technology and Telecommunications, and Healthcare and Biotech.  ACQ invests in these sectors, but also sees innovation across all sectors of the Australian economy.  Acorn Capital sees success stories in multiple industries and don't see why Australian investors should be restricted by industry when investing in venture capital.




Key Features

About the Fund

Acorn Capital Investment Fund (ASX:ACQ) is a listed investment company that invests in a diverse portfolio of emerging Australian companies. Emerging Companies (or Microcaps) are defined as those with an equity valuation that is below that of the 250th largest ASX company. Such companies may be either ASX-listed or unlisted and Australian incorporated (or have an Australian nexus). ACQ provides investors with a means to gain exposure to invest and support the innovation and growth characteristics of these businesses.

Investment philosophy

ACQ seeks to identify and exploit mispricing in the Australian listed microcap sector and also invests in attractive unlisted securities in order to generate outstanding long-term investment returns.

With relatively less research on the microcap sector, mispricing is more prevalent in this sector than large caps. Inefficient markets lead to opportunities to uncover investments that may provide greater returns superior to those available in the broader market. In addition, investments are sought that will provide impact investing.

Why invest in ACQ?

ACQ's portfolio provides an investor with access to a sector of the market (being Emerging / Microcap Companies, including private/unlisted opportunities) that are not typically available to retail investors.  This presents a diversification opportunity for individual investors as well as access to a long-established research team.

About the Investment Manager

Acorn Capital is a specialist small and emerging company investment manager, with a strong track record of managing investments.

Established in 1998, Acorn Capital believes that in-depth fundamental research, both at the sector and company level, is essential when investing in emerging companies.

Acorn Capital has one of the largest and most experienced specialist emerging company investment teams in Australia.


How we invest your money

ACQ is managed by Acorn Capital Limited, the pioneer of Emerging Company or "microcap investing in Australia.

An active, research-driven investment manager, Acorn Capital's experienced team has a tried and tested active approach of bottom up stock picking as well as sector analysis and thorough valuation techniques that are applied to the assessment of investment opportunities. The research process is vigorous and regular company interaction is undertaken.

The following investment guidelines apply to the implementation of ACQ's investment strategy:

  • ACQ invests in those ASX listed companies outside the Top 250 by market capitalisation as well as similarly sized unlisted companies, where such opportunities are deemed to be relatively more attractive than their listed peers.
  • A diversified portfolio which reduces volatility. A maximum of 7.5% of the value of the portfolio (at the time of investment) will be directed to any single investment.
  • Maintains broad economic diversity and positions impacted by return profile, size of company and expected capital requirements.
  • Cash holdings will be at a level considered appropriate by the investment manager from time to time.
  • Exposure to unlisted companies will vary with investment rate and as liquidity events occur
  • Can invest in equities or equity linked instruments like convertible debt or debt with attached warrants/options 
  • Investment in Australian domiciled companies or those deemed to have a significant Australian link, (for example, having resident Australian management or intent to list on the ASX).