Van Berkom adds Europe to its global coverage

High quality names

Former Optimum Group member Patrick Lamontan joined the company in June 2021 to “set the table for future growth”. Its goal is to double the $ 5.6 billion in assets under management over the next 5-10 years, thanks in part to a strategy to hedge global markets.

The choice of Europe to create a new fund was imposed, explains the manager, given the weight of the continent on the world chessboard and the fact that the company is looking for quality securities, ie companies with experienced management teams, sustainable competitive advantage, solid results and high profitability capital.

The small-capped Van Berkom Global Equity Fund is half of the US stock and a quarter of the European stock. The rest of the distribution is divided between Canadian (13%) and Asian (11%) shares. Investments are concentrated mainly in the consumer, industry, finance and information technology sectors.

The fund will be offered on the basis of a joint fund (joint fund), a means of facilitating investment in low-capitalized securities made in several countries. CIBC Mellon has been selected as a trustee for this service in Canada.

Good time

Established mainly in the Canadian and US markets since 1991, Van Berkom has been present in Asia since 2012 through the opening of an office in Hong Kong. Its client base consists of large North American and European pension funds, corporations, funds and funds.

The investment strategy of the firm is characterized by the concentration of securities. “The four funds in the portfolio include a maximum of 35 to 55 high-quality, well-managed, but undervalued, low-cap companies that persist for the long term,” said the chief operating officer.

This concentration allows the firm to develop in-depth knowledge of the companies in its portfolio. “We know them 100%. We meet with the leaders of each of them at least four times a year, ”says Patrick Lamontan. Because financial information on small investments is not readily available, analysts are working extensively on the ground to clarify their assumptions about profitability.

According to the manager, p deadlines to run a fund is great because there is a place in the market. According to him, the supply of small-cap stocks is limited, as many of them are closed to new investments due to their size in the illiquid market, where it becomes difficult to trade outside a certain level of assets.

In addition, the global small capitalization market is increasingly attracting the attention of pension funds. “In recent years, they have tended to abandon the Canadian market, which is very focused on cyclical sectors such as energy, to focus more on small investments, which allows them to look for the alpha factor internationally,” said Patrick Lamontan.

New team, new mandate

Steps to create a new fund began in September 2021 under the leadership of Zhou Lin, who was appointed general manager of Van Berkom’s global strategy in 2021. The Chinese-born financial analyst joined the firm in 2012 as a partner in Hong Kong. office before moving to the US market in 2017.

The team also includes Melissa Gasser and Karim Haddad, who were hired as key analysts last year. Melissa Gasser worked at Sagard Holdings and Portag3 Ventures before being hired by Van Berkom. She also worked at the Caisse depot et placement du Québec (CDPQ) and at Montrusco Bolton.

Karim Haddad has worked at CDPQ, where he has been Director of Global Financial Services since January 2020. He previously worked for the investment division of Canadian National. He was also a consultant at Bain’s office in the United Arab Emirates.

A third analyst, Alexander Tiscione, is, like two of his colleagues, a graduate of Concordia University, where he participated in Van Berkom’s investment management program, an initiative that allows students to 2and low-capitalized equity portfolio management cycle. Meanwhile, he was a partner at Stifel in Montreal for two years.

Over the past few months, the team has conducted an in-depth search of information in the European market in order to select about twenty high-quality stocks. This choice was then submitted to a military room Patrick Lamontan, consisting of the firm’s partners who tested the proposals. From that moment on, the securities portfolio was gradually increased.

withstand storms

Despite the turmoil in the global market, the executive believes that there are good opportunities for the small-cap market. “We are focused on our long-term vision. We invest in high-quality securities with low leverage and able to withstand storms like a geopolitical crisis. This approach allows us to work better than average. »

In the future, the company intends to remain focused in this area. “We are recognized as specialists with low capitalization. We will not go for anything else, but we want to expand the range of proposals, “- says the manager. The next step will be the launch of the EAFE Fund (Europe, Australia and the Far East), developed outside the US and Canadian markets.

The company was founded in 1991 in Montreal by Sebastian Van Bercom from Canadian shares. The founder retired from investment management a few years ago, but as a minority shareholder and board member he continues to play the role of strategic advisor. The pursuit of his vision is provided by a team of 15 partners led by Mathieu Siroua, a senior manager of US small-cap stocks who has been president of the company since January 2021.


Release date: July 2022

Benchmark: MSCI ACWI Small Cap

Approach: Ascending

rotation: from 15% to 25%

Minimum initial investment: $ 1 million