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International Small Cap


The Paradice International Small Cap Strategy was established in October 2020 and applies the philosophy and process of the Global Small Mid Cap Strategy (launched August 2010). The team is comprised of six investment professionals including Co-Portfolio Managers, Paul Mason and Toby Shute. 

The Strategy typically invests in 40-60 well-capitalized businesses that the team believes are undervalued relative to the quality of the franchise.

The team believe minimizing downside in volatile markets is critical in positioning the strategy to have the opportunity to compound investor capital when markets recover. They intend for this combination of undervaluation and thoughtful risk management to create the opportunity for double digit compounding and outperformance of the benchmark over longer time horizons.

Strategy Details (as of 03/31/2024)

Strategy characteristics, including allocations are those of the Paradice International Small Cap Strategy and are provided for informational purposes only as of the date shown only. Actual characteristics and allocations may vary significantly over time. Active Share is a statistic used to measure the percentage of the portfolio that differs from a benchmark index (MSCI ACWI ex USA SMID Cap Index), with 100% implying no overlap with the benchmark and 0% implying total overlap.

Philosophy and Process

The team aims to capitalize on inefficiencies in the international small cap space by uncovering competitively advantaged businesses trading at substantial discounts to their determination of intrinsic value. Employing a fundamental, bottom-up investment process, they construct a portfolio of 40-60 international businesses outside the U.S. characterized by enduring business models, sound balance sheets, and adept management. Their approach is benchmark agnostic. And while country and sector allocations are largely the outcome of the team’s stock selection process, the portfolio manager consciously diversifies across geographies and industries.

The team invests with a long-term view with a business owner mentality, seeking involvement to influence outcomes, and will proactively pursue dialogue with portfolio companies. Engagement on perceived risks and opportunities supports their objective to grow intrinsic value while thoughtfully managing risk.

Why International Small Caps

The international small cap space is vast and relatively under-researched by both buy- and sell-side participants, leading to market inefficiencies and the potential to uncover attractive investment opportunities.

Smaller company sizes often lead to increased access to management for bottom-up, fundamental investors with significant shareholdings. Where outcomes may be meaningful or material, Paradice seeks to leverage such access and actively engage to impact environmental, social and governance policies/practices and improve business value. 

International small cap equities, in the team’s view, offer numerous potential benefits for capital allocators including diversification, alpha generation opportunities for active managers and the potential for attractive investment returns. Historically, small cap equities have outperformed their larger cap peers, particularly when investing in portfolios of quality, undervalued small-cap businesses.

Portfolio Management

Toby Shute

Toby joined Paradice in October 2015. Toby was most recently with Centaur Capital Partners, a value-oriented, long-biased investment advisor. Prior to Centaur, he worked for The Motley Fool as both an Analyst on a special situations-focused investment newsletter and as a Contract Writer/Analyst for Toby has over 17 years of financial services industry experience. Toby holds a BA from Rice University.

Paul Mason

Paul joined Paradice in February 2010 as a Trader working closely with the Australian Small Cap Team. In 2013 Paul relocated to the US in the role of Analyst for the Global Small Mid Cap Strategy, subsequently taking on a portfolio management role in 2019. Prior to Paradice, he was employed at KPMG in the Business Advisory and Taxation division. Paul has over 14 years of experience in the asset management industry. Paul holds a Commerce degree with majors in Accounting, Finance and Business Law from the University of Wollongong, Australia.

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The information provided herein is designed for institutional investors, consultants, and investment professionals. The content of this website is provided for informational purposes only, without regard for the financial objective or specific needs of any investor and does not constitute an offer to sell or buy any securities and may not be used or relied upon in connection with any offer or sale of securities. Those who are not considered an institutional investor or person acting on behalf of an institutional investor should not review or act upon the information provided via this site. Information contained on this website is not intended for any jurisdiction in which distribution is not authorized under applicable law nor are the materials intended for distribution to the general public in any jurisdiction.

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