Key Features

 

Montanaro: the Small Cap experts

100% focus on European & UK SmallCap Equities means we have to get it right;

Based in London; active management of long only portfolios;

Founded by Charles Montanaro in 1991; independent and financially secure;

Managing Open-end Funds, Investment Trusts, Institutional mandates;

We have outperformed our benchmarks by 4-6% p.a. over the long term;

  - 12/14 fiscal years in the UK and 8/10 calendar years in Europe.

 

People: the leading SmallCap Team in London

Properly resourced with 23 staff from 7 nationalities;

Team has continued to grow with low turnover;

4 portfolio managers with average 16 years’ experience;

9 Research Analysts; 16 investment professionals in total;

Equity participation by management & staff;

Family culture, emphasizes hard work & effective decision-making;

 

Investing in SmallCap Equities: to outperform in a high return asset class

Very diverse universe; over 6000 companies in Europe;

SmallCap outperforms Large Cap - by 3.2% p.a. in the UK over 54 years;

SmallCap equities offer diversification vs. Large Cap;

Good managers can outperform, by 2-3% p.a. or more;

SmallCap outperforms Large Cap by 7% p.a. in bull markets.

 

Philosophy: thin research coverage creates inefficiencies

The SmallCap effect will persist; stock Specific Risk can be easily diversified;

SmallCap will remain inefficient and so will the Alpha opportunity;

Proprietary, detailed research is essential to avoid being broker led;

Investing in high quality companies is the best way to invest in Small Cap;

This “Warren Buffett” philosophy reduces risk & portfolio turnover;

Common sense and experience are vital.

 

Process: do the work in-house, focus on quality, “invest in the best”

Bottom-up stock picking creates the outperformance;

Proprietary idea generation is the key – using in-house databases;

Identifying truly quality companies is the primary step in the research process;

We prefer simple, niche, growth, high margin businesses we can understand;

Strong management and a robust business model are essential;

We meet the management; we know our companies and they know us;

Analysts are organised by sectors and create the Approved List of 150 - 200 companies;

A Pan-European approach;

We value companies ourselves and set price targets, using multiple proprietary models;

Each portfolio has one Portfolio Manager, fully accountable for performance.