Only the good companies
Benchmarking does not play a role at Lupus alpha. Our portfolio managers have the freedom to deviate from consensus and thus exploit market opportunities.
Information inefficiencies represent opportunities
Market inefficiencies are essential for above-average returns. The more particular the market segment, the greater the chance of maximizing returns by gaining an information advantage.
Bottom-up approach exploits information gaps
The primary objective throughout the small- and mid-cap segment is to unearth the most attractive equities – 'hidden champions' and true 'cash cows'. As well as analyzing the business models of each prospective investment, Lupus alpha's specialist Small & Mid Cap team relies upon findings from first-hand company visits and management assessments.
Exposure in European small and mid caps
Diversified portfolio with broad diversification across sectors and regions
Use of the empirically proven size premium
Team approach:
close integration of portfolio management and research
Head start:
Systematic use of information inefficiencies
Specialization:
Large team of small- and mid- cap managers experienced over many market cycles
Control:
Methodically secure risk management. Transparent trading processes throughout
Stockpicking:
Consistent bottom-up approach to individual stock selection
Global Market Leaders with Strong Margins
European small and mid caps give investors access to the entire economic value chain. In the European equity universe, smaller companies account for around 90% of all listed stocks and about 24% of total market capitalization. Many of them are hidden champions: companies with a focused business model that dominate their niche as global market leaders, enjoying strong bargaining and pricing power. These firms’ robust competitive positions are reflected in attractive margins, enabling them to emerge stronger from recessions and often even gain market share during crises. They typically generate a high proportion of international revenues, making them well-positioned even in a cooling European economy. Many benefit from megatrends such as digitalization, robotics, artificial intelligence, climate change, or autonomous mobility. Their sector diversity represents one of the greatest opportunities in European small caps. Information inefficiencies, strong corporate growth, upgrades to higher equity segments, or acquisitions by large caps can drive significant price momentum and alpha opportunities for active managers.
Traditionally Higher Valuations
Small caps have traditionally been valued higher than large caps due to their stronger growth potential. Since 2000, European small caps have outperformed large caps by around 360 percentage points (as of December 2025). This is due not only to their business models and growth prospects but also to the empirically proven small-cap premium, which compensates for lower trading liquidity.