The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The TM Oberon UK Smaller Companies Fund aims to achieve long-term capital growth by investing in small UK-domiciled or exposed businesses, operating under the core thesis that the deep valuation dislocation in UK smaller companies represents a historic, multi-decade opportunity. During April 2026, the fund rebounded strongly, returning approximately 10.7% and significantly outperforming the IA UK Smaller Companies Sector's 7.7% gain. Key contributors included Flowtech Fluidpower, which recovered from oversold levels, and Light Science Technologies, which benefited from a strategic acquisition. Conversely, Travis Perkins detracted due to weak UK construction activity, prompting the fund to add to its position. Despite geopolitical tensions and persistent inflation concerns following the US-Iran conflict, the manager maintains a constructive outlook. Portfolio positioning is highly concentrated in smaller companies, with nearly 88% of assets in companies with market capitalizations under £500 million, while maintaining an 8.0% cash position to preserve deployment flexibility.
UK small-cap equities present a historic, multi-decade valuation discount that offers highly compelling long-term capital growth potential as market dislocations resolve.
The manager remains highly confident that UK small-caps offer compelling upside from depressed valuation levels. Continued investor recognition of the historic valuation discount is expected to drive long-term capital growth as domestic and overseas buyers step in.
As of Mar 31, 2026
Richard Penny serves as Senior Fund Director and portfolio manager, managing the fund since October 31, 2022. He is a Citywire AAA-rated fund manager with over 15 years of asset management experience and holds a master's degree in Engineering and Economics from Oxford University. Penny received an AA rating from Citywire in October 2022 and previously managed the TM CRUX UK Special Situations Fund at CRUX Asset Management starting in October 2018. His background includes significant experience at prominent investment management firms including LGIM, M&G, and Scottish Amicable Investment Management. Penny joined CRUX Asset Management in June 2018 before transitioning to Oberon Investments. His investment approach is grounded in fundamental analysis and focuses on identifying undervalued smaller UK companies with significant growth potential.
The fund employs a high conviction, fundamental value investing approach with a size bias towards mid and small cap companies. The investment strategy focuses on growth at reasonable prices and value opportunities, targeting companies that are often underappreciated by the market. The approach emphasizes identifying companies with 'triple positive factors': revenue growth, high gross margins resulting in accelerated profit growth, and potential for market re-rating. The fund manager asks three core questions for each investment: 'How good is the business? What is it worth? Does it improve the portfolio?' The strategy involves investing at least 75% of assets in the lowest 10% of UK listed companies by market capitalization, monitored quarterly. The fund employs a bottom-up, active stock-picking approach, concentrating on companies with improving growth in revenues or profits where the companies are considered undervalued.
Lead Portfolio Manager
Moderate Conviction Bullish
Market Conviction
While the portfolio holds 42 positions—indicating moderate diversification—the manager demonstrates high conviction in individual picks by explicitly adding to Travis Perkins on weakness and participating directly in capital raises.
Growth Outlook
The manager is highly bullish on the UK smaller companies market, describing the valuation dislocation as a 'historic opportunity' with prices at multi-decade lows. This extreme optimism is tempered only slightly by acknowledged short-term geopolitical and inflationary risks.
Risk Appetite
With 92% of the portfolio invested in equities and active buying of detracting positions on weakness, the fund displays a strong risk-on posture. However, it maintains an 8.0% cash buffer to remain opportunistic.
Capital Deployment
The fund has actively deployed capital into a placing for Light Science Technologies and added to existing holdings like Travis Perkins. Cash is stable at a moderate 8.0%, reflecting a steady but opportunistic deployment stance.
Forward Guidance
The manager shows a strong bias toward action, having recently participated in a private placement for Light Science Technologies and added to Travis Perkins on share price weakness.
Language Signal
The commentary is dominated by positive descriptors such as 'compelling upside', 'historic opportunity', and 'strong recovery'. Negative terms are limited to explaining specific temporary headwinds in construction or geopolitics.
Perceived Risk
The manager notes geopolitical tensions from the US-Iran conflict and inflation concerns but views these primarily as volatility-inducing events that create buying opportunities rather than structural risks to the fund's holdings.
Opportunity Density
Opportunity density is rated very high, as the manager highlights that UK small-caps are at multi-decade valuation lows, meaning the market is rich with mispriced, high-upside assets.
Time Horizon
The fund's objective explicitly mandates a 5-year or longer investment horizon, and the manager's investment theses focus on multi-year self-help programs and operating leverage recovery.
Top Conviction Themes
Key Catalysts
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