Our business principles lie at the heart of who we are and how we operate. We believe these principles are essential for long-term success. We define success in terms of our commitment to delivering strong long-term risk-adjusted returns within a well-defined investment framework.
By focusing on the interests of our clients and aligning ourselves with those interests, we create a durable partnership, where success is mutual.
Our reputation is our biggest asset. We will do everything to avoid damage to our reputation. We adhere to the letter and spirit of the law and regulations, because ethical behaviour is the foundation upon which to build long-term relationships and our business.
At SilverCross we are focused on investing in just one asset class, that is global small-cap equities. In our quest to be a leading investment manager in global small-caps, we know that we have to continuously challenge ourselves. it means going the extra mile in everything we do and always being open to further improving our processes. We encourage independent thinking, learn from inevitable mistakes, and aim for excellence in everything we do.
We work in a small team, where each person’s contribution weighs heavily. You have to be both talented and passionate at what you do. That’s why we are uncompromising in our selection of new colleagues, just like with our investments. We believe working in teams ensures a dynamic of optimism and high standards.
Participations in the Fund are qualified for sale in the Netherlands. SilverCross Global Small-Cap Fund does not pro-actively sell participations to investors residing outside of the Netherlands.
The minimum initial investment amount is Eur 100,000. Any subsequent investments must exceed Eur 25,000.
Before making any decision to invest in SilverCross Global Small-Cap Fund, we strongly recommend reading the Prospectus.
SilverCross Global Small-Cap Fund may be distributed through IBS Asset Management BV or through a licensed EU / EVA financial institution. Investors wishing to invest through their own advisor can do so by providing them the following ISIN code: NL0010832242.
All income generated by the Fund is treated as fiscally transparent. This means any income such as dividends and interest are taxed based on your individual tax position. We recommend consulting with your tax advisor about the potential tax consequences. Upon request, a list of all income received by the fund is available for your tax affairs.
For investors whose investments are treated in ‘Box 3’, the value of the Fund as of 1 January of each calendar year must be submitted to the tax authorities without any further requirements relating to income generated by the Fund.
Please note that your subscription will be processed the first Transaction date following the receipt of the investment amount, which is weekly on Wednesdays, or the first business day thereafter if the Dutch stock market is closed. The Investment Manager has the discretion to determine additional Transaction dates at any time.
The Fund Manager encourages potential investors to view an investment in the Fund as a long-term holding. Therefore, in case an investor wishes to sell its participations within 90 days after purchase, an anti-dilution levy of 3.0% of net asset value per participation will be incurred by the investor. This penalty serves to discourage frequent trading in Fund participations.
The Fund Manager is allowed to suspend or limit subscriptions or redemptions in the interest of existing participants. For more information about situations in which this can occur, see the Prospectus.
‘Hot’ floats are like ‘buying a lottery ticket,’ warn small-cap specialists
Most of this year’s big name IPOs will have lost investors money within the next five years, predicts Dutch-based global small-cap investment specialist SilverCross.
There have been a flurry of major-name companies with big floats this year, including Uber’s mammoth $82 bn listing and Beyond Meat’s sizzling IPO, which has proved to be the best performing flotation of the year, as well as WeWork, setting up for a big September IPO – in what has amounted to the most active period for IPOs since the dot.com heyday in the late 1990s.Read more
For all that, Chris Andrews and David Simons, co-managers of the highly ranked SilverCross Global Small-Cap Fund, put a different spin on the situation, warning investors they should be cautious.
In SilverCross’s most recent quarterly report to investors, the managers say investing in ‘hot’ IPOs is like ‘buying a lottery ticket’.
‘Investors are clearly attracted to IPOs, and the key difference now is that companies coming to the market have existed on average for 12 years versus only four in 1999,’ the managers note. ‘We avoid them, not because we don’t believe in their business models or their growth potential, but because of a combination of the valuations of these businesses in relation to the risks involved as well as the fact many have never made a profit.’
These IPOs translate, warn the managers, ‘into highly speculative investment propositions’. Putting this statement into historical perspective they note: ‘In the period 1980-2016, almost half of all IPOs had lost more than 50 percent of their value within five years, while another 20 percent had lost up to 50 percent of their value.’
In addition, only five percent of all IPOs had a five-year stock price return exceeding 400 percent, ‘so investing in these businesses is more like buying a lottery ticket,’ assert the managers.
Andrews, whose fund has returned an impressive 122 percent to investors since launching five years ago – versus the MSCI World Small Cap Index’s return of 64 percent – says the team’s investment process means they steered clear of these ‘hot’ IPOs.
‘We look to own between 25-35 small-cap companies globally which have strong long-term track-records, robust balance sheets and typically enjoy recurring demand for their products,’ Andrews says. ‘We want management teams to be invested in the equity of the companies they run, and we like family-owned businesses because their long-term approach fits with ours.’
While skeptical about the number of IPOs in 2019, Andrews nevertheless adds that the notion that stocks are in bubble territory is misplaced, with the price-earnings ratio of global small caps now at 20 times – versus the 20-year average of 29 times.
‘Although there are pockets of the market that may be overheated, given our concentrated portfolio we continue to find compelling investment opportunities,’ he notes.
‘The companies we invest in each aim to contribute to making the world a better place, and we invest in companies that make products or deliver services that people need, rather just like to have or use. This offers resilience during more challenging economic times, which may or may not come in the next 12 to 24 months.’
Highlighting this in detail Andrews highlights how global stock markets have declined strongly twice in SilverCross’s history when the fund’s resilience showed its worth: between April 2015 and February 2016, the China market crash and concerns of the pending end of quantitative easing in the US drove the MSCI World Small Cap Index down by 25 percent. But SilverCross declined by just 12 percent.
In the most recent market setback at the end of 2018, the index fell 22 percent, versus 15 percent for SilverCross.
‘Market declines are inevitable,’ notes Andrews. ‘We maintain a consistent and disciplined approach and do not worry about market declines. Instead, we use them as opportunities to buy great businesses on sale and hold them for the long term to benefit from the power of compounding. Time in the market, not timing the market is what drives wealth creation.’
Most of this year’s ‘hot’ IPOs will loose money within the next five years, warned Citywire AA-rated pair Chris Andrews and David Simons.
They manage the SilverCross Global Small-Cap Fund, which has returned 58.4% in three years to 30 June 2019.Read more
While, a flurry of big-name companies have come to the market in the past year, including Uber, Beyond Meat and Pinterest, Andrews and Simons have stayed clear and compared investing in such IPOs.
‘We avoid them not because we don’t believe in their business models or their growth potential, but because of a combination of the valuations of these businesses in relation to the risks involved as well as the fact many have never made a profit.'
Therefore, in fund managers' view such companies are similar to highly speculative investments.
They added that in the period from 1980 to 2016, almost half of all IPO’s had lost more than 50% of their value within five years, with another 20% experiencing up to 50% decrease in their value.
‘Only 5% of all IPOs had a five-year stock price return exceeding 400%, so investing in these businesses is more like buying a lottery ticket,' they said.
While sceptical about the spate of IPO’s in 2019, Andrews said that the notion that stocks are in bubble territory is misplaced as the P/E of global small-caps is now at 20 times versus the 20-year average of 29 times.
SilverCross is proud to relay that its Portfolio Managers, Mr. Simons and Mr. Andrews, have been awarded an AAA rating by Citywire, the highest possible rating. The rating is based on the Fund’s 3-year performance in relation to the risk it has taken. Out of a total universe of 13,500 fund managers Citywire tracks, less than 2.5% are awarded an AAA rating.
“Generating a strong long-term risk-adjusted performance for our participants, which include several SilverCross and IBS employees, is our primary goal. We are honoured and at the same time humbled by the Citywire recognition of our achievements so far,” say the PMs. SilverCross’ 3 year performance and its global ranking can be found on Citywire.
This press release is dated 14 December 2017. The Citywire rating may change every month.
Morningstar, a leader in independent investment research, has recognised SilverCross Global Small-Cap Fund with its highest-available 5-Star rating in the ‘global small-cap’ category. Only the top-10% of products in each product category receive five stars. SilverCross Global Small-Cap Fund also currently ranks number one in terms of three-year total return in that same category.Read more
David Simons, Managing Director & Portfolio Manager: “Since our inception in 2014, our commitment has been to build a best-in-class track record in global small-cap equities. We are entirely dedicated to this goal – our team manages no other investment strategies. As such, the recognition by Morningstar of our achievements so far is greatly appreciated. Investors looking for our approach to investing are increasingly entrusting their money to SilverCross, resulting in asset under management approaching Eur 140* million.”
Chris Andrews, Director & Portfolio Manager: “While Past performance cannot guarantee future results, we believe that our disciplined and focused investment approach, investing in about 30 well-managed businesses that can compound in value over the long-term, bodes well for a continuation of the investment track record built so far. We truly invest for the long-term, which is exemplified by our portfolio turnover of approximately 10%, implying we hold each of our investments for an average of 10 years.”
This press release is dated 1 November 2017. The Morningstar rating may change every month.
Global small-cap equity managers David Simons and Chris Andrews have set up their own investment firm designed to meet the needs of institutional investors.
The pair, who previously worked for Dutch group Kempen NV, have formed Amsterdam-based SilverCross Investment Management.Read more
It was formally established in partnership between company founder Simons (pictured left) and IBS Capital Management, a Dutch fiduciary and asset manager.
Speaking to Citywire Global, Simons and Andrews said the focus of the firm will be to establish itself as a specialist in high-conviction, global small-cap equity investing.
‘In terms of the launch of the company, it was about finding the right process to do this globally. In large-cap equity, real estate and bonds, we have already seen a move towards global some years ago but this is not the case with small-cap equity,’ Simons said.
‘This is an area that is definitely growing, as we see more players entering this segment, but it is still in its infancy, so we are going to see a real move towards the market looking at global small-cap opportunities.’
The duo has therefore launched a global small-cap equity fund, which is currently only available to Dutch institutional investors. However, the company is readying the application for AIFMD-compliance to allow it to distribute to a wider audience.
This fund invests in between 25 and 35 companies with an average holding period of at least three years. Small-cap stocks are those defined as having a market cap between €250 million and €5 billion at the time of purchase.
‘We like well-managed, growing businesses,’ Andrews said. ‘We are looking for great businesses that are trading at cheap valuations, while staying away from areas which we feel are too complex.’
Simons and Andrews, who oversee all investment aspects of the group, are supported by an investment analyst who helps cover the Asian market. Meanwhile, IBS provides a support team covering compliance, operations management and general management.
We believe our people are one of the most important contributors to success. Attracting and retaining a team of talented individuals is both challenging and extremely valuable. The strength of our team will be reflected in the strength of our long-term investment returns. We are always looking for exceptional and ambitious individuals that want to work in a team-oriented, collaborative working environment. If you are passionate about investing and in search of a workplace where you can develop and grow both personally and professionally, we invite you to send us your resume to email@example.com.