NovaPort Capital team calls it a day

The team at small caps manager NovaPort Capital have decided to hang up their boots.

A decision was made on May 13 to wind up the small cap Australian equity manager, Fidante told investors, saying the NovaPort team had made the call to close the business.

While Fidante considered finding an alternative investment manager for the NovaPort Microcap Fund and NovaPort Smaller Companies Fund, it said the uncertainty of doing so coupled with the result of the business review and expected decline in flows ultimately meant it was in the best interests of investors to close them.

In a statement to Financial Standard, a spokesperson for Fidante further explained: "Following an extensive review, NovaPort Capital has made the difficult decision to close its funds management operations. The review determined that the growth potential of the business along with the personal ambitions of the NovaPort principals meant now was the time to close the business."

"Acting in the best interest of investors, the NovaPort founders will manage the selldown of assets and wind-up of the funds, which is expected to be concluded by 30 June 2024, subject to market conditions."

In total, NovaPort Capital had about $303.6 million in funds under management as at March end, the bulk of which was held in the Smaller Companies offering on behalf of retail investors. Institutional mandates only account for about $55 million.

Over three years, the NovaPort Microcap Fund outperformed its benchmark, the S&P/ASX Small Ordinaries Accumulation Index, delivering 1.71% against the index's 0.02%. Meanwhile, the Smaller Companies Fund delivered 2.43% against the same benchmark. Over five years the Microcap Fund achieved 7.7% while the Smaller Companies Fund returned 4.99% against the benchmark's 3.93%.

NovaPort started out in 2010 with about $200 million, with both funds having been spun out of Challenger Funds Management along with managers Alex Milton and Sinclair Currie. Tim Binsted joined later in 2019 as an analyst before becoming a portfolio manager.

At its height, the boutique had just over $1.2 billion in June 2018. However, later that same year its funds under management took a nosedive, essentially halving, and while the team managed to claw some of it back during 2019 and 2020, it's been in steady decline since December 2020.

The NovaPort Microcap Fund is a complying investment for the Significant Investor Visa (SIV) program and expects to meet the SIV requirements as of its wind-down, Fidante added.