Eustace Santa Barbara's view on: Why we believe UK smaller companies present a compelling long-term opportunity

While smaller companies can be more volatile, we believe the flurry of M&A activity at this end of the market demonstrates that private equity houses and trade buyers share our view about the exceptional value on offer.  

We have seen signs that sentiment is improving and we expect this to continue as the path of interest rate cuts becomes clearer. We also welcome moves by politicians to encourage investment by pension funds into smaller growth companies, as part of plans to revitalise the UK stock market.  

We believe that high-quality smaller companies, many of them in industries benefitting from powerful structural growth trends, can continue to outperform their larger counterparts over the long term.  

Our view is that the current disconnect between valuations and company fundamentals will not last forever – but that, while it exists, it presents a potentially rare opportunity.

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Discover the five reasons

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.