{"id":71067,"date":"2025-10-16T14:25:31","date_gmt":"2025-10-16T21:25:31","guid":{"rendered":"https:\/\/penderfund.com\/?post_type=commentaries&p=71067"},"modified":"2025-10-21T15:06:48","modified_gmt":"2025-10-21T22:06:48","slug":"pender-global-small-cap-equity-fund-september-2025","status":"publish","type":"commentaries","link":"https:\/\/penderfund.com\/fr\/commentaries\/pender-global-small-cap-equity-fund-september-2025\/","title":{"rendered":"Fonds d\u2019actions mondiales \u00e0 petite\/moyenne capitalisation Pender - septembre 2025"},"content":{"rendered":"\n

September was another positive month for equities, with global markets hitting record highs despite ongoing uncertainty. In Canada, the S&P\/TSX Composite and Small Cap Index reached new levels, while in the US the S&P 500 and Nasdaq advanced on positive performance in technology. Small caps also participated, with the Russell 2000 up 3.8% in September and 8.9% year-to-date.<\/p>\n\n\n\n

Markets welcomed the Fed\u2019s 25 bp rate cut, which was well telegraphed and seen as supportive without reigniting inflation. Attention is now turning to the potential for further easing in Q4. Outside the US, returns cooled in September but remain ahead of the S&P 500 YTD, with emerging markets\u2014led by China, Korea, and Taiwan\u2014delivering robust gains thanks to currency shifts and supportive domestic policy.<\/p>\n\n\n\n

Performance<\/h3>\n\n\n\n

The Pender Global Small\/Mid Cap Equity Fund is down ~1.3% YTD. In September, the Fund posted a gain of 0.2%1<\/a>, compared to the S&P\/TSX Composite Index which gained 5.4%, and the S&P\/TSX Small Cap Index which gained 9.0%. Our weight in Canadian equities is ~71.3%, with ~22.5% in US equities and a small ~4.5% allocation held outside North America.<\/p>\n\n\n\n

Fund specific updates<\/h3>\n\n\n\n

Although the Fund underperformed its benchmarks in September, we remain confident in our strategy. In a challenging macro environment, we are focused on high-quality businesses trading at reasonable valuations and capable of compounding value over time. We continue to see attractive opportunities in our holdings, particularly as M&A activity accelerates.<\/p>\n\n\n\n

For example, in September one of our holdings dentalcorp Holdings Ltd (DNTL)<\/strong> announced that is being acquired by GTCR LLC for $11\/share in cash, a 33% premium to close before the transaction was announced. <\/p>\n\n\n\n

A long-term trend we\u2019ve also noted is the attractive valuations in small caps, which continue to provide a tailwind as valuations revert toward historical averages\u2014a shift already visible in some of our holdings.<\/p>\n\n\n\n

Top Contributors<\/strong><\/td>Contribution<\/strong><\/td>Top Detractors<\/strong><\/td>Contribution<\/strong><\/td><\/tr>
dentalcorp Holdings Ltd (DNTL)<\/td>+118 bps<\/td>Vitalhub Corp. (VHI)<\/td>\u201358 bps<\/td><\/tr>
Aecon Group Inc. (ARE)<\/td>+71 bps<\/td>Burford Capital Limited (BUR)<\/td>\u201364 bps<\/td><\/tr>
Telesat Corp (TSX: TSAT)<\/td>+70 bps<\/td>Dye & Durham Limited (DND)<\/td>\u2013125 bps<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Performance was positively impacted by dentalcorp\u2019s<\/strong> takeout (as mentioned previously) as well as Telestat<\/strong> which we highlight below. On the detractor side, Dye & Durham<\/strong> weighed on returns after the company warned it would miss its audited financial statement deadline and sought a management cease-trade order. The stock hit new 52-week lows amid continued boardroom disputes and pressure from former executives and shareholders to sell the company.<\/p>\n\n\n\n

Portfolio Activity<\/strong><\/td>Action<\/strong><\/td>Rationale<\/strong><\/td><\/tr>
Zillow Group Inc. (ZG)<\/td>Trim <\/td>Legal and regulatory headwinds, market dynamics<\/td><\/tr>
International Flavors & Fragrances Inc. (IFF)<\/td>New<\/td>Buying opportunity at an attractive valuation<\/td><\/tr>
PAR Technology Corp. (PAR)<\/td>Add<\/td>Buying opportunity at an attractive valuation<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

This month, we added to several of our high-conviction ideas. PAR <\/strong>is a global foodservice technology company that provides omnichannel, cloud-based software and hardware solutions to the restaurant industry. The stock reached a 52-week low during the month, and we took the opportunity to increase our position. We continue to see a disconnect between PAR\u2019s intrinsic value and its underlying business fundamentals.<\/p>\n\n\n\n

We see a similar dynamic with our new position in International Flavors & Fragrances <\/strong>, a leading creator of taste, scent, nutrition, and ingredient solutions for consumer products and industrial applications. With shares down sharply over the past year, we believe there is a meaningful valuation gap between market price and intrinsic value. The company remains on track to meet its 2025 commitments despite a challenging operating environment, and we continue to view the name favorably.<\/p>\n\n\n\n

Stock Highlight: Telesat Corporation<\/h3>\n\n\n\n

Telesat operates in the global satellite communications industry \u2014 an area with scarce spectrum rights, high capital intensity, and durable competitive advantages. The company recently announced the spin-out of its majority interest in Lightspeed, its next-generation low-earth orbit (LEO) satellite constellation. This is an important step in restructuring the business and improves equity holders\u2019 leverage in negotiations with debt holders.<\/p>\n\n\n\n

Our investment thesis rests on two key drivers:<\/p>\n\n\n\n

    \n
  1. A near-term balance sheet restructuring that should help de-risk the capital structure<\/li>\n\n\n\n
  2. The successful execution of Lightspeed, which is being designed and assembled by another Pender portfolio holding company, MDA Space Ltd (MDA)<\/strong>.<\/li>\n<\/ol>\n\n\n\n

    Investment Highlights<\/strong><\/p>\n\n\n\n