Investors Mutual founders launch new venture

The former investment director and founder of Investors Mutual (IML) Anton Tagliaferro is launching a new fund management business, focussing on small caps, with a new fund already made available for investors.

Fundamental Investment Management's first fund - the Fundamental Smaller Companies Fund - has opened, providing access to select local small companies.

Under the new structure, Tagliaferro serves as the investment director, joined by Simon Conn as the fund's portfolio manager. Both were integral in the establishment of IML, as each of them having served close to 30 years in the company.

Tagliaferro left IML in 2023, with Conn leaving in June 2025.

Commenting, Tagliaferro said the "activist ownership" approach he employed in the past will dictate how Fundamental IM operates.

"We will not simply sell and run the moment a company runs into adversity," he said.

"If we have done extensive work and believe in the true underlying value of the business, we will be prepared to actively engage with the board and management of the company to ensure shareholders' interests are optimised."

Fundamental IM will concentrate on smaller companies, with Tagliaferro seeing opportunity to build a well-diversified value portfolio.

"Large-cap managers are virtually forced to own the major banks and resources stocks, even though many of them are now trading at record valuations," Tagliaferro continued.

"Investing in the small-cap sector gives us a much wider field to work with.

"Of course, not every small company is worth owning, but there are many businesses that are under-researched. We believe this area is ripe for experienced stock pickers who use a patient value approach to buy some great smaller companies at very good prices."

Tagliaferro added that markets have become extremely short-term in nature.

"At the end of the day, a company's share price is meant to reflect its long-term value. This is something that many investors, large and small, seem to have forgotten in today's world of indexing, quant and momentum-driven trading," he said.

"My concern is that a time is coming when many investors will realise that the top holdings in the index or quant fund that they own do not represent anywhere close to the true underlying value of the companies held."

He believes current economic conditions, particularly rising interest rates, are creating strong opportunities for disciplined value investors.

"Many small-cap stocks have been hit extremely hard in recent months, and we believe some are now trading below their underlying value," he said.

"If the economy slows further, it is likely that more stocks will become oversold - and historically, that is when patient value investors have been able to pick up good companies at very favourable prices."