Well, Spheria is a new shop vs UBS being quite established....

Well, Spheria is a new shop vs UBS being quite established. However Spheria's PM's are not inexperienced, having come out of Schroders who have a good record in the space. And at any rate, UBS's microcap fund hasn't been running much longer anyway.

Another obvious issue is fees. UBS are materially cheaper at 0.85% pa vs Spheria at 1.2% pa (which is also the industry average for microcap funds). Performance fees are both the same.

Capacity is always an issue to watch with small/micro cap funds. Luckily, this is not an issue for either manager, both are running about the same FUM levels. However business profitability is an issue for Spheria. Given their total FUM is ~$200+m last time I looked, they are unlikely to be profitable quite yet. So there is a risk that they don't get there. Personally I think they'll be ok with Pinnacle doing their distribution.

Team wise, UBS have a bit more depth on bench, which is important. But that said, Spheria is not terrible. As a new shop, it's adequate. Also worth noting that the two PM's have worked extensively with each other previously which is a definite positive.

Returns targets and TE bands, Spheria are reaching higher than UBS. Spheria's target is the Small Cap Index + 3% pa net of fees whereas UBS is just the small cap index net of fees only (i.e. no hurdle). I would say that their research processes are both sound and logical.

On the whole, If I had to choose, I don't really know which I'd go for without more digging. Probably UBS just because of the fee issue. But I think they are both fine. My real pick would be Perpetual in this space, but they are soft closed. I have just put in (and should have filled) an allocation to the WAM Microcap LIC. But of course that will be a microcap proxy given the LIC structure.