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Investing in smaller companies in developed markets with an aim to exceed the return of the benchmark on a three-year rolling basis.


Our team meets with the management of hundreds of companies across the US, UK, Europe and Asia-Pacific each year to gain direct investment insights.

Hamish Galpin

Lead Portfolio Manager

High quality

Long-term investment in high-quality stocks generates excess returns over market cycles and also provides downside protection in adverse conditions.

Focus on stock-specific risk

We aim to outperform through stock picking rather than sector and geographical exposures.

Long-term investment

 Our usual holding period of three to five years allows us to participate in the secular growth characteristics exhibited by many small-cap stocks, and to exploit typical market short-termism.

Extensive experience

We have managed regional small-cap strategies since 1987 and this experience determines the approach now applied by the global fund.

Investment approach

We aim to exceed the return of the benchmark on a three-year rolling basis. We invest in smaller companies in developed markets (North America, Europe, Australia, New Zealand, Japan, Hong Kong and Singapore). The strategy is benchmarked against the MSCI World Small Cap Index.

Focusing on the quality of companies is a core element of our philosophy. We employ a multi-factor appraisal methodology which looks for and evaluates characteristics such as a durable competitive advantage and sustainable growth. As a result, the strategy aims to generate a high return on equity and high stability of returns compared to the benchmark. Our strategy is deliberately long-term focused. This is, we believe, an important factor in generating alpha from small caps: such an approach is necessary to capture the market-share-gain phase of successful smaller businesses, and to take advantage of market short-termism.

Stock ideas are sourced from our regional small-cap portfolios. This effectively narrows the universe from more than 4,200 stocks to about 250. We undertake a large number of company meetings and overseas trips each year to find new ideas and monitor existing holdings. Each potential investment is peer-reviewed, with the lead manager ultimately determining stock selection and portfolio construction. The fund consists of 50-70 stocks, which helps to ensure that we focus on the best companies and generate a high active share.

We aim to concentrate as much risk as possible in stock selection – our core competence – while maintaining low exposure to sector and geographical risk as this, we believe, generates superior risk-adjusted returns.

The search for quality

We evaluate each company for evidence that they meet the criteria of quality, and their individual merits are discussed at regular stock review meetings. It is not necessary for any one investment to fully satisfy all of the criteria, but they must be perceived to be sufficiently strong on an overall basis. A quality score derived from this assessment contributes to our portfolio construction process.

Past performance is not a reliable indicator of future results and targets are not guaranteed.


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Sales Contacts

Clive Selman,
Head of UK Distribution
James Lucas,
Director, UK Institutional Sales
Douglas Anderson,
Head of Consultant Relations
Kirsty Beasley,
Director, Consultant Relations
Anna Roberts,
Director, Consultant Relations
Kate Hillyar,
Director, Business Development, UK