Prime Highlights
- Forager’s international fund holds 29.2% in technology stocks, led by Japanese firms favoured for lower valuations and early subscription model adoption.
- The firm tripled returns on its Comfort Systems exit while adding new positions across Japan and Europe.
Key Facts
- Forager Funds Management is a Sydney-based firm managing $390 million in assets, focused on undervalued global businesses.
- The firm targets software companies with high switching costs, network effects and strong capital return track records.
Background
Sydney-based Forager Funds Management, which oversees $390 million in assets, has outlined its strategy for global equities, leaning heavily on Japanese technology stocks while hunting for overlooked opportunities across Europe.
Portfolio manager Gareth Brown said the firm’s international shares fund carries 29.2% exposure to technology, with Japanese tech making up the largest share. He noted that Japanese tech companies are earlier in the transition to subscription models, offering faster growth and more attractive valuations compared to their US counterparts.
Technology now accounts for roughly a third of the fund, reaching its internal limit after the firm made modest additions in Japan and picked up two new European positions. Forager has long maintained minimal exposure to highly valued US technology stocks, a stance that held firm even as AI-linked software firms sold off in broader markets.
On the portfolio activity front, the firm booked a strong exit from Comfort Systems, a US infrastructure services business, which returned more than three times the original investment. It also stepped away from Canadian oilfield technology company Pason Systems after the business fell short of initial expectations.
Among its current picks, Forager holds Clinica Baviera, a European ophthalmology clinic operator benefiting from an ageing population, and Inchcape, a UK-listed global car wholesaler that trades at attractive valuations and consistently returns capital to shareholders.
