Very small could be beautiful

ladybird_410Investing in the stock of very small listed companies could be a viable alternative to private equity, says Robert Marren, managing director, portfolio manager at Allianz Global Investors Capital. "Equity investors of a company, whether public or private, do so with the expectation of growth of capital. In an era of vastly underfunded pensions, plans are looking to private equity's historically high return potential to help bridge funding gaps. In light of this activity, investors may be ignoring another asset class with similar potential to enhance their portfolio returns, namely micro-cap equities," he says.

Micro caps are often an overlooked asset class because of lower research coverage and the tendency for small-cap managers to move up the capitalisation spectrum in an expanded small-cap mandate.

Micro caps also offer advantages over private equity in terms of liquidity, transparency, competitive risk-adjusted returns, generally lower fees, no lock-ups, and public data, says Marren. ©2010 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.