Examples include the mortgage broker network the Mortgage Advice Bureau, which was sold after exceeding the market cap – but only after the fund benefitted from 140 per cent of share price growth.
The fund now holds Belvoir Lettings – which is the UK’s largest franchised lettings agency with almost 400 businesses across five brands. A key part of its expansion into offering financial services alongside its lettings and sales was the acquisition of Mortgage Advice Bureau’s largest franchise.
There are other examples in other industries, be it software with dotdigital (past holding) and Attraqt or music with Focusrite and Gear4Music.
Micro-caps are not for the faint hearted but they also offer outstanding growth opportunities. We like the team’s disciplined process with the fund only focusing on companies which already generate a profit. Victoria Stevens describes it best: “We don’t mind ‘jam tomorrow’, as long as we’ve got bread and butter today.”
Darius McDermott is managing director of FundCalibre
