Little Champs

Little Champs follows a long only equity strategy focused on identifying high quality small cap companies with strong competitive advantages, clean corporate governance and sustainable earnings growth potential. The strategy invests in niche companies often referred to as hidden champions which operate in specialised markets, possess strong customer relationships and build competitive advantages through quality, performance and proprietary processes. The investment universe begins with approximately eleven hundred listed companies with market capitalisation below one billion dollars and undergoes a structured research process. The first stage applies a proprietary forensic accounting screen using multiple accounting ratios to eliminate companies with governance or accounting issues, followed by fundamental filters based on revenue growth, return on capital employed and ability to generate strong cash flows. The remaining companies undergo detailed bottom up research including analysis of annual reports, management interactions and independent channel checks to verify management claims and capital allocation discipline. Portfolio construction results in a concentrated portfolio of around thirty companies with long holding periods and low churn focused on firms demonstrating pricing power, improving efficiency, strong cash generation and reinvestment led growth. The strategy aims to identify future large companies early in their growth journey. Sector agnostic and small cap.