About Us

 

Who We Are

TBF Investment Management Pty Ltd (TBF IM) is a boutique fund manager that was established in 2012. Co-founded by its directors, Peter Durbin, Yaron Shamgar and Sam Orr, TBF IM was established for the purposes of managing investment in the micro to small cap space of the Australian Securities Exchange (ASX). TBF IM manages the TBF Small Cap Value Growth Fund ARSN 162 561 613 (Fund).  The TBF IM investment committee, carrying a combined 50 years of professional experience in financial markets in Australia and internationally, dictates all investment decisions of the Fund. For further information about our investment process and stock selection mandate in respect of the Fund, please refer to our Product Disclosure Statement here.

Our Philosophy

At TBF IM we firmly believe that each company has an underlying intrinsic value having regard to all aspects of its business, and that in listed equity markets it is not uncommon for the relationship between a company’s intrinsic value and its market traded value to decouple for varying periods of time. We believe that there is a “sweet spot” available for disciplined boutique fund managers like TBF IM, to capitalise on this pricing inefficiency. Our principal philosophy is that within the field of inefficiently priced smaller companies, it is possible to generate returns in excess of thebenchmark (S&P/ASX Small Ordinaries Index) over the medium to long term by seeking out and investing in smaller companies that have strong businesses and exhibit both value and growth characteristics.

Within our investment framework and process we maintain enough flexibility to exercise our subjective judgment in order to capitalise on our stock picking abilities. We believe that the best way to generate returns in excess of the Benchmark is to construct a concentrated but appropriately diversified portfolio of the very best investment opportunities available. With a concentrated portfolio we are able to spend the required time to comprehensively understand each business we invest in and therefore aim to generate returns in excess of the Benchmark by allocating assets of the portfolio to the best opportunities.

“We believe that high quality businesses exist in all shapes and sizes. It is our job as investment managers to unearth hidden value in the less researched corners of the market. Whether a company is growing strongly but too small to be noticed by the market, or a business is unloved and unwanted yet has managed to unshackle itself from its troubled past, we don’t discriminate but instead choose to dig further so we can uncover and deliver value to our investors.” Ron Shamgar

What We Look For

Primarily we are on the hunt for companies that we believe are trading at a discount to their intrinsic value and have potential for earnings momentum over the next two years. We seek out smaller companies that operate businesses we understand, that have earnings we believe are less exposed to the economic cycle, that have a proven history of generating good cash flows, have gearing levels that appear to be sustainable in the future and are run by management we rate and respect, ideally with “skin in the game”. Overlaying all these factors we are always conscious of identifying near term catalysts that are likely to turn an undervalued and overlooked company into a market darling.

We look for companies that are generating free cash flow, preferably with low capital requirements and operating in industries that have bright prospects. We don’t consider ourselves to be “librarians”, though looking at historical performance of a business is important, we don’t necessarily believe that past performance is a true indication of future prospects. In fact, we believe that sometimes the best opportunities lay where long suffering shareholders are to be found.“ Peter Durbin

Our Entrepreneurial Approach

We believe that it is critical to establish and maintain strong and open communication with a company’s management in addition to maintaining strong relationships with the broking community across Australia. By maintaining these relationships we aim to position the Fund to capitalise on short term opportunities such as off market transactions, discounted placements, IPOs and other similar opportunities. We believe this is a key area where institutional investors (such as the Fund) have a marked advantage over sophisticated private investors.

We believe that meeting with company management is critical in the small cap space. We want to meet with management of the companies in which we are looking to invest, to determine whether or not they have the skills, experience and energy to generate positive and sustainable shareholder returns. In our experience, ongoing interaction with management enables us to obtain an insight and understanding of a business that is often unavailable to more passive investors.” Sam Orr

How We Manage Risk

TBF IM addresses the risk of investing in small cap stocks by drawing on the experience of our investment committee (carrying a combined 50 years of professional experience in financial markets in Australia and internationally), by following its detailed investment criteria, through concentrated diversification and by spending the time to fully understand each business the Fund invests in. For further details concerning the risk of investing in the Fund please refer to PDS and Additional PDS Disclosure here.

Warning: The information given on this website is general information only, which means it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the information is appropriate to your needs before acting on it, seeking advice from a financial adviser or stockbroker as necessary.

Important Information: TBF IM is the investment manager of the TBF Small Cap Value Growth Fund, a registered managed investment scheme with ARSN 162 561 613 (Fund). Equity Trustees Ltd ABN 46 004 031 298, AFSL number 240975, is the responsible entity of the Fund and the issuer of the Fund’s product disclosure document (PDS). The PDS contains important information, including information about the risks of investing in small caps. You should obtain and consider the PDS before making a decision to invest in the Fund.  TBF IM is an authorised representative, under authorised representative number 434240, of Farnam Investment Management Pty Ltd ACN 149 971 808 (Farnam). Farnam holds AFSL number 430574. Our Financial Services Guide is available here: TBF Financial Services Guide