Sanford DeLand (SDL) hopes to substantially grow its top-performing Free Spirit fund after "broadening" the sub-£10m fund's investor base as it reached its three-year anniversary in January, according to co-manager Andrew Vaughan.
Vaughan, who replaced Rosemary Banyard late last year after she departed a few months earlier, said SDL is now actively marketing the fund, which is already starting to attract inflows.
The fund has returned 35.8% over three years to 3 May, according to FE fundinfo, placing it comfortably in the top quartile of the IA UK All Companies sector which has lost 7% over the same period.
Vaughan noted that growing the fund, which invests primarily in small- and mid-cap stocks with flexibility to invest in some larger stocks, to the levels of SDL's flagship £1.3bn Buffettology fund would be "counterproductive".
In addition, while he cautioned it was difficult to name a definitive figure, Vaughan explained the fact that its largest holding, £200m market cap EKF Diagnostics, is 7% of the portfolio suggests "the fund being able to get to at least £250m before we would have to review".
Vaughan said: "The biggest challenge or rebuttal we get from investors is people saying it is too small at present. But we are getting some quite steady inflows into it.
"The shareholder base has changed around very nicely over the last year.
"There were half a dozen founder shareholders who helped get the fund started, and most of them have switched out so we now have instead a much broader base of smaller investors and the fund is much more widely held than it was a year ago."
The fund's performance year-to-date has also held up well against broader market turmoil, with Free Spirit down just 4.8% since the start of the year compared to its sector's decline of 17.1%.
Vaughan pinned the fund's relative stability over the past few months to its process, which enabled the management team to "sidestep sectors we think are too complicated or risky".
He explained: "We have had no exposure to any banks or financial companies, no oil and gas, no retail, or leisure stocks - the four worst-hit sectors in the market this year."