EV SMALLER COMPANIES FUND
EValuation Capital Management B.V. was founded in 2006 and manages the EV Smaller Companies Fund, a long/short equity fund of which the most important characteristics are:
- actively managed concentrated ‘long/short’ equity portfolio;
- consisting of shares of smaller quoted companies well known by the fund manager;
- geographically focused on Dutch, Belgian and German companies; and
- emphasis on risk management with balance between capital growth and capital preservation.
Smaller quoted companies
The EV Smaller Companies Fund invests primarily in smaller quoted companies (with a maximum market capitalization of € 2.5 billion). Many of these smaller companies are not well known and receive less attention from analysts, as income from transactions in these companies is much lower as compared to blue chip companies. Less attention means that the market for these companies is not as efficient and therefore offers more opportunities for conducting own fundamental research. The fund manager’s approach can best be described as ‘stockpicking’.
The fund manager uses strict investment and liquidity criteria. On the basis of these criteria, out of a list of all European quoted companies, a ‘short-list’ is constructed. This is the investment universe of the fund and comprises some 200 companies. The developments of these are closely monitored by the fund manager, from research reports by brokers to interviews with the companies and its competitors, but also press releases and financial reports. A lot of emphasis is put on contacting the companies in the investment universe. The fund manager frequently talks to these 200 companies through company visits and by attending company presentations.