PenderFund all-cap manager seeks out unloved stocks

"Micro corrections" present opportunities, says Felix Narhi.

Michael Ryval 1 March, 2018 | 6:00PM
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With roots in the venture-capital arena, PenderFund Capital Management Ltd. gravitated easily to the small-cap space, mainly because of the abundant opportunities to find attractive, little-followed smaller companies. That focus has broadened in the past few years to the all-cap universe, which presents unloved stocks that the firm says are ripe for the picking.

"We began in 2003 as a venture-capital private-equity firm investing in smaller companies in British Columbia," says Felix Narhi, chief investment officer of the Vancouver-based firm, which manages about $720 million. "This knowledge base was transferred into the smaller-company space. Once Pender became a prospectus-based fund company in 2009, it was a natural progression. There are more opportunities because fewer people are following small companies, which tend to be more misunderstood."

A 14-year industry veteran who joined PenderFund in 2013, Narhi's roles include portfolio manager of the $20-million Pender US All Cap Equity and co-manager of the flagship $283-million Pender Value. Narhi stresses that, personally, he is size-agnostic and focuses on all-cap stocks, "albeit I recognize that there tends to be better opportunities in smaller-sized companies."

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Michael Ryval

Michael Ryval  Michael Ryval, a regular contributor to Morningstar, is a Toronto-based freelance writer who specializes in business and investing.

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