Microequities Venture Capital Fund

What is Microequities Venture Capital Fund?

Microequities Venture Capital Fund, headquartered in Australia, is a venture capital fund focused on investing in undervalued ASX-listed microcap companies with compelling business models. Their investment thesis centers around identifying these microcap companies that have the potential for long-term capital growth and sustainable, high long-term dividend payments.

The key investment criteria mandate that companies must be highly undervalued, profitable for at least 2 years, have low or no debt, generate high cash flow, and possess high earnings visibility and future earnings predictability. Additionally, they prefer companies operating in growing sectors with growth catalysts, competitive advantages, or strong brand names, stable management, significant management stakeholding, and a reputable board of directors.

Microequities conducts all investment research in-house, maintaining independence from market noise. They maintain a concentrated long-only portfolio, typically consisting of 15-40 companies with an investment horizon exceeding 5 years. The fund seeks to provide semi-annual cash distributions, underpinned by their philosophy of value investing.

The investments are usually held for longer than 12 months, which contribute to discounted capital gains for unitholders. Microequities' investment manager has extensive experience in the microcap sector, and they are also co-investors in the fund, aligning their interests with their clients.

Despite their focus on higher long-term growth, they acknowledge that investments in microcap companies come with greater volatility and risk factors, as detailed in their Product Disclosure Statement (PDS).