The dual-located boutique firm, Pie Funds Management, has tweaked its product set again, shuttering one, renaming another two and adjusting a string of benchmarks.
In it monthly newsletter published last week, Pie founder, Mike Taylor, says the group, which has almost $1 billion under management, had closed the Australasian Growth Fund to new investments.
“This was the Fund I started Pie with, so it’s a real milestone to see it reach the $100m level and capacity,” Taylor says in the manager’s monthly newsletter.
Pie also adjusted the investment mandate on the now-closed fund, increasing the number of stocks it can hold from 20 to 25 – in line with its two other Australasian small cap products.
After shutting the door on further flows to the Australasian Growth fund, Pie now has seven products open for investment.
The similar $80 million plus Australasian Emerging Growth fund also remains closed to further investment after shutting the door in the 2016/17 period.
Last September, Pie reopened three formerly ‘soft closed’ products – including the Australasian Growth Fund – following a capacity review that identified some space for further flows into the small-cap vehicles. In November 2019, Pie wound-up the troubled $30 million Multi-Strategy fund, reducing its fund suite to nine.
The latest Pie refresh has also seen the manager rebadge two funds “to help better categorise what they invest in”, Taylor says.
Under the rebranding, the Climate Friendly Fund takes on the Global Growth 2 title while the Global Companies product is now known simply as the Global Growth Fund.
Meanwhile, the Pie amended the target asset allocation for the Conservative Fund from the current 80/20 mix of NZ term deposits and its Australasian share funds, respectively, to a more diversified mix of mainly fixed income assets. Under the new settings, the conservative fund targets 25 per cent NZ cash, 20 per cent local fixed income, 35 per cent global fixed interest, and 20 per cent international shares.
The conservative fund adjustments also triggered a change to NZ dollar-denominated benchmarks across the Pie range. Finally, the Pie UK/Europe Growth Fund has switched from a Morningstar benchmark to a MSCI Europe Small Cap index.
“This is because the index better reflects the strategy of the fund, while including the United Kingdom, has a broader, pan-Europe focus,” Pie told investors. “We note since the inception of the fund, the MSCI Europe Small Cap Index has performed better than the Morningstar UK Small Cap Index so, at least on historical performance, the new index is tougher to outperform.”
The Pie note says the fund redesigns are intended to make the products easier to understand for investors, provide more flexibility for portfolio managers and standardise benchmarking.
“Note the need for some of these changes has been highlighted by the severe market volatility arising from COVID-19, but predates COVID-19,” Pie says. “The changes have been discussed and planned for some time and are being implemented now because we wanted to ensure they were made all at once.”
This June Pie, which has offices in Auckland and Havelock North, embarked on a restructure that saw seven employees exit the manager and a rejig of roles across the group.
In January last year the firm abandoned a bid to sell up to 75 per cent of its equity (in a deal that valued Pie at $100 million) to interested external parties to support ongoing growth plans. Pie, which started life as a small cap specialist, abolished its performance fees, effective April 1, 2019.
As at the end of May, Pie reported funds under management of just under $1 billion, split between almost $840 million in its unit trusts (net of cross-holdings) and close to $150 million in the Juno KiwiSaver scheme.