Lannebo Europe Small Cap - European Small Cap fund that invests in small and medium-sized quality companies
Lannebo has always believed in Small Caps – and in 2016 we took the leap into Europe. To succeed we welcome two new fund managers to our team. We consider Carsten Dehn and Ulrik Ellesgaard to be among the very best fund managers of European small caps.
Why invest in European Small Cap?
- Lannebo delivers genuine active management. Therefore, instead of staring at the screens, following the index and the stock market, we deepen our knowledge of companies we believe in. We look for, find and meet with companies with strong business ideas, stable balance sheets and great potential to invest in early on. Over the years we have developed a keen eye for quality companies that are profitable and can continue to perform for our unit holders over the long term regardless of external conditions. We like when companies are experts at what they do, preferably world leading and we would like to see strong owners’ / management teams that advance the business forward.
- The small-cap market is less efficient compared to large caps, allowing for greater potential of additional returns in each investment compared to the overall market. Despite the fact that the majority of European companies are small caps there are fewer players that monitor and analyse them. We want to capture these opportunities with our proven approach where we evaluate each company based on our own critical analysis.
- Of Europe’s 9,000 listed companies, 8,000 are small caps (market cap <5 billion EUR). With such a large pool of potential investments it becomes more important to selectively evaluate the opportunities, while also considering risks. Your investments are important to us and we are extremely careful in our risk assessment and analysis. Before we actively invest in a stock, we spend considerable time evaluating the downside of the investment: the risk of losing money!
Lannebo European Small Cap is an actively managed equity fund that invests in small and medium-sized enterprises in Europe. The companies the fund invest in should have a market capitalization not exceeding 5 billion EUR, or the equivalent in another currency at the time of investment. The fund may invest a maximum of 10 per cent of its value in companies with headquarters in Europe, but not listed in Europe, and / or without restriction to the size of the companies’ market capitalization.
The fund is suitable for those who
- want to invest in small and medium-sized companies listed on European equity markets
- want an actively managed fund where investments are based on a clear understanding of each individual company
- can accept that fluctuations in performance may occur, and have an investment horizon of at least five years
The fund managers make active investment decisions through analysis and equity selection. Focus is placed on each of the fund’s individual investments and their long-term potential. We strive to avoid being distracted by elements affecting the share price short-term. This leads to investments in quality companies, where we can have a knowledgeable opinion about their future growth potential, and where a company’s valuation is attractive.
The goal is that the fund, while taking a balanced approach to risk, should provide the best possible return. The performance of the fund is compared to the MSCI Europe Small Cap Index. Since the fund is actively managed, performance over time will deviate from this index.
Lannebo Europe Small Cap conducts genuine active management with focus on long-term, profitability and sustainability. The funds managers choose holdings on the basis of a thorough company analysis. The managers assess factors such as the company’s business model, market position, growth opportunities and risks. How a company takes responsibility towards people, environment and society also affect its future growth. Therefore, before making an investment the portfolio managers complete an internal company sustainability analysis. The managers analyse and assess various areas of sustainability and review whether there have been previous sustainability incidents. The managers then rate the company based on the results of the analysis. The internal analysis also includes a rating from an external sustainability service provider. Lannebo’s active management means that our managers develop a deep knowledge of each holding, which we believe is a prerequisite for being able to integrate sustainability into the investment process. We are long-term investors and our task is to invest in companies that will be profitable and deliver to our fund investors a good return over time at a reasonable risk. The managers also meet with company managements regularly to monitor developments and discuss sustainability.
Lannebo Europe Small Cap does not invest in companies that violate international conventions or in companies that produce and/or distribute controversial weapons. The fund also refrains from investing in companies in which more than 5 per cent of the company’s turnover comes from the production and/or distribution of tobacco, cannabis, alcohol, weapons, gambling or pornography. The fund also refrains from investing in companies in which more than 5 per cent of the company’s turnover comes from extracting of fossil fuels (coal, oil and gas).
Risk Indicator (SRRI)
Basic fund facts
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