UK - Britannic Asset Management is backing an initiative which aims to encourage schemes to invest in UK small cap companies.
The fund manager said small cap companies offered a lucrative opportunity for investors and were being ignored at a cost.
A new guide setting out the advantages of taking the domestic option over international investment banks has been produced by the National Association of Pension Funds and the Quoted Companies Alliance.
And BAM head of small companies Roddy Davidson believes the sector is too productive to ignore.
He said: “There are not a lot of mandates out there for asset managers to chase and it is puzzling why there should be a trend towards pan-European investment.
“It seems there is an adjustment to demand which is not yet there.”
Davidson welcomed the NAPF/QCA guide and suggested that investors ignoring small caps did so at their peril and could be missing out on enterprises which were potentially the “international players of tomorrow”.
City Equities – a UK company which focuses exclusively on speculative “penny shares” in the small cap sector – said it was these lesser-known and often undervalued stocks which came closest to offering the chance to make substantial capital gain.
It acknowledged penny shares carried a greater degree of risk than blue chip or mid-line investments but pointed out they also had “the potential to deliver explosive capital growth”.
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