Make the most of investing in smaller companies with our specialist team
Smaller companies can offer excellent investment opportunities. However, investing in small-cap stocks is often ignored by investment and wealth management firms, who may lack the expertise and experience to evaluate the potential of these companies, spot opportunities and invest on your behalf.
At Canaccord Genuity Wealth Management (CGWM), we do have that breadth and depth of small-cap investing expertise, including a dedicated small-cap investment committee and specialist small-cap investment analysts. This committee has over 360 years of combined investment management experience – an average of 24 years each. In fact, we are among the most experienced independent UK wealth managers in this area, with a long history and heritage.
Why invest in smaller companies?
Investing in smaller companies can deliver superior returns and growth. Historically small-cap stocks have outperformed large-cap stocks, but they are a more volatile investment and come with a higher risk. That’s why it’s important to have an expert in small-cap investing by your side.
We believe investing in small-caps can be a very important part of a truly diversified and well balanced portfolio – whether you’re investing directly in small-cap shares or via a specialist fund – and we will include this niche area within your discretionary portfolio if we believe it's appropriate.
However, investing in smaller companies also carries a higher degree of risk than investing in the more liquid shares of larger companies, so they are not appropriate for all investors. They may be difficult to sell at the time you choose and are more volatile and, while they can offer great potential, growth is not guaranteed.
If you would like to find out more about investing in smaller companies and whether it would be appropriate for you, please contact us for a free consultation.
What are small-caps?
While they are referred to as ‘small-caps’, these companies are not micro businesses, like your local coffee shop or boutique. They can be well-established market leaders and household names, as well as businesses carving out a niche in certain markets or expanding. Names include Creo Medical, ASOS, Hotel Chocolat, Fever-Tree, Hilton Foods or McColl’s – all of which we mention here for the purpose of providing illustrative examples, rather than being an investment recommendation.
These companies’ market capitalisations are relatively small i.e. the value of the company that is traded on the stock market, calculated by multiplying the total number of issued shares by the present share price.
As illustrated below, when we talk about investing in small-cap stocks at Canaccord Genuity, we mean smaller companies that:
- Are listed on AIM*
- Or have a market capitalisation of less than £2bn, but are not within the FTSE 100 – this includes companies within the FTSE 250, FTSE SmallCap and FTSE Fledgling Indices.
* The companies listed on AIM can have a market capitalisation above £2bn.
How can I benefit from your team of small-cap investment experts?
Small-caps are often over-looked by the wealth management industry because they require a high level of research and analysis to find the hidden gems. Even in our data-rich, digital world, many great small-cap stocks are subject to very limited analyst coverage. This is where our investment specialists come into their own.
They have been finding and analysing smaller companies for many years and understand what they are looking for – and what it takes for a business to be successful and offer strong growth potential for investors. Furthermore, as they are well-known in the small-caps arena, they are often invited to meet the company’s management directly and are regularly presented with interesting new investment opportunities which they will analyse on your behalf.
They are also supported by the size and scale of Canaccord Genuity which means we have a substantial annual investment market research budget (running into the hundreds of thousands) and long-term relationships with all the key small-cap brokers, giving us a strong competitive advantage.
What services do you offer?
You can take advantage of our in-house investment expertise through our small-cap equity-only portfolio service or as part of a diversified investment portfolio. Both options are available as either a discretionary account or on an advised stockbroking basis, if you prefer to make your own trading decisions.
CGWM Small-Cap Portfolio Service (equity-only)
This is our standalone ‘Small-Cap Portfolio Service’, which is an equity-only and very high-risk portfolio only suited to certain types of investors who are willing and able to take higher risk and more volatility in exchange for potentially higher growth. Some clients use this service to carve out a small-cap investment portfolio as part of their overall wealth.
If you would like to explore this option, our specialist small-cap investment managers can work with you to determine if this service would be suitable for you - request a free consultation.
For more information about how we classify different types of investment portfolio, you can download ‘Our investment risk framework’ here. This type of portfolio would be classified as a Risk 8 or 9, our highest risk profiles.
CGWM discretionary portfolio management
More usually, exposure to small-caps can be included as part of a diversified portfolio if we think it is appropriate for your personal situation, which also includes large caps and other assets classes.
Read our guide to small-cap investing
Small-cap stocks are surrounded by myths and misunderstandings – and we are often asked ‘what are small caps?’ We are here to help de-bunk some of those issues, so please feel free to contact us to ask any more questions or download our free ‘Guide to small-cap investing’ here.
Investments in smaller companies, including AIM stocks, carry a higher degree of risk than investing in more liquid shares of larger companies, so they may be difficult to sell at the time you choose. Investments in smaller companies are more volatile and, while they can offer great potential, growth is not guaranteed.
- Adam Caplan, Investment Director
- Adam Newman, Investment Manager
- Alex Van Moppes, Investment Director
- Andrew Findlater, Investment Director
- Dan Marks, Investment Director
- Daniel Coleman, Investment Director
- Ian Berry, UK Small Cap Equity Analyst
- Laurence Leigh, Investment Manager
- Leon Shuall, Investment Director
- Michel Perera, Chief Investment Officer
- Paul Parker, Head of Intermediary Investments
- Richard Champion, Deputy Chief Investment Officer, UK
- Russell Wynn, Investment Director - Stockbroking
- Simon McGarry, Senior Equity Analyst
- Thomas Holliday, Investment Director/Deputy Branch Manager
If you would like more information about small-cap investing, you might like to read the following articles:
- Why should you invest in the FTSE All-Share Index vs only the FTSE 100?
- Keep calm and carry on
- AIM to manage IHT – the advantages of investing in the Alternative Investment Market
- Canaccord comes out top in Telegraph reader investigation
- Investment opportunities in Europe – forget the macro – focus on the micro
- Giles Hargreave wins awards recognising his outstanding work for investors
Keeping you informed
If you have been keeping cash deposits in formerly reliable accounts such as National Savings & Investments, Premium Bonds or government bonds, and you have seen interest rates falling, it's time to rethink your arrangements. At Canaccord Genuity, we will be happy to discuss alternative ways of investing your capital while aiming to achieve returns above inflation.Read more
Our Deputy Chief Investment Officer Justin Oliver, chats with Dan Mahony, Co-Head of Healthcare at active fund manager Polar Capital about the incredible pace of change driven by the pandemic and the healthcare investments trends emerging from it.Read more
Some of our small-cap experts
If you would like to know more about our small-cap offering please get in touch. We will be delighted to provide more details of our services.
How can we help?
If you would like to know how we can help with your investment management, wealth or financial planning needs, get in touch. We will be delighted to provide more details of our services.
IMPORTANT: Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. Past performance is not a reliable indicator of future performance.