Sirtex turnaround pays off for Naos

"They've still got a very good business; they're growing 30 per cent, still treating a lot of people at end-stage or late-stage cancer," he said.

Looking at potential investments, he puts a lot of emphasis on the management behind the business, balance sheet and catalysts. "The big thing for me is probably brand and revenue. I've learnt that it's very hard to build a brand from nothing."

It is this line of thinking that led him to Billabong, another unloved stock, which he holds."We've been big believers in something like a Billabong, believe it or not. Great brand, billion-dollar revenue base, no earnings. I would argue it's a lot easier to grow earnings from a billion-dollar revenue base [than just a great idea]."

He has also invested in Eureka Group Holdings, a small-cap company targeting an unaddressed segment in aged-care facilities. "This business is looking at aged care for people who are poor to very poor, on the pension, who can't really afford to keep their house and support themselves. They go to Eureka:it has more of a community feel."

Evans is himself a 40 per cent owner of Naos, and takes a dim view of professionals who invest outside their own fund. Coming out of the financial crisis, Naos reported some blistering results. Since then, the fund manager has added two listed investment funds – it was the first to land on the ASX in six years at the time – as well as its unlisted funds, but Naos retains a boutique sensibility.

David Rickards, who was the former head of research at Macquarie, is the chairman of the listed Naos Emerging Opportunities Co, which has beaten its benchmark by around 50 per cent since the float.

"The pressure of monthly numbers is not great but it is what it is," Evans says. He got his first break in the industry working at the former Morgans retail broking franchise at Burleigh Heads. His father, Warwick Evans, used to run Macquarie Equities and is now a small investor in Naos.

One of Evans' lessons from the global financial crisis and the European sovereign debt crisis has been never underestimating the extent to which an event is or is not priced in. "Whenever you think something's priced in, until the announcement happens, it's never priced in," he emphasises.

He has also seen the small-caps market evolve over the past 10 years. "If you look at the small caps industry in Australia, I think a lot of the managers of small caps have probably been a victim of their own success because they're so big you'd argue that a lot of what they invest in aren't really small caps.

"We invest in businesses that are $20 million, we invest in businesses that are $1 billion that might have one big shareholder. Reece is a great example," he says, referring to the bathroom supplies group Reece Australia controlled by the Wilson family. "No one will really invest in it because it's too illiquid. It's been one of the best performers around for a long time."