- This Small Cap strategy targets companies with a market cap between $200m – $2.5bn.
- We focus on value, trying to buy the best quality companies for the best possible price.
- Quality companies are distinguished by the sustainability and growth of their free cash flows, rather than just their earnings.
- These companies should be able to clearly articulate their competitive advantage. Ideally this will comprise a competitive moat wide enough to preserve high profitability.
- The preferred measure of value is free cash flow yield, although up to 20% of the strategy can be allocated to companies trading below book value.
“The greatest attraction of the GEM small cap universe is it’s inefficiency. One third of its 3,000 stocks has no analysts covering them, another third has fewer than 5. Our stand-alone research process thrives on this and aims to identify great, cheap companies that have the potential to re-rate. Only after these stocks have doubled will a global bank initiate with 20% upside.”Mark Asquith – Lead Manager