Fund guru backs small fry

STOCK picker Terry smith is launching a listed investment fund focusing on smaller companies around the world. The businessman, 65 ( pictured), says smaller companies typically outperform large companies and are often undervalued as they have less scrutiny from analysts. His smithson Investment Trust will focus on firms worth between £500m and £15bn and will list on the London stock Exchange.

It will be part of his main £18bn Fundsmith Equity Fund, which smith set up in 2010 and helped make his name as one of the city’s best fund managers. smith, a helicopter pilot and Muay Thai boxer who lives in Mauritius, plans to invest £25m of his own cash into the fund. Fundsmith partners and employees will also invest £5m at the IPO which is due to take place on October 19.

smithson will be run by former Goldman sachs bankers simon Barnard and Will Morgan, who have identified 83 potential investment targets and would pick 25 to 40 at launch. Barnard said: ‘We believe these can compound in value over many years, if not decades. I, along with other members of the team, will be investing significantly in the fund at launch.’ Potential investments reportedly could include tonic maker Fever-Tree. smith – whose strategy is simply ‘buy good companies, don’t overpay, do nothing’ – left for Mauritius in 2016 because he found the noise of London too distracting.