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QUAERO CAPITAL 
This week the Geneva-based asset management company QUAERO CAPITAL has launched Quaero Capital Funds (Lux) – Quaeronaut Small & Mid Cap, a new European equity sub-fund of its Luxembourg SICAV Quaero Capital Funds (Lux). 

The fund will invest in European small and mid-cap stocks, including Swiss and the UK, which has traditionally been one of the most vibrant sectors of the European equity markets, the firm said in a statement. 

Based on the “value” investment philosophy that the firm believes made the flagship fund Argonaut a success, Quaeronaut offers access to a slightly larger market cap threshold than the microcaps targeted within the Argonaut investment universe. 

The new fund will be managed by Adrian Bignell and the Quaero Capital European investment team.

Focused on Europe, it concentrates on small and medium-sized companies, with a market capitalisation of between €1 ($1.1) and €10 billion. The result is a concentrated portfolio of some 40 to 50 positions, which, over time, will typically trade at a PE discount of 10 per cent to 20 per cent to the MSCI Europe SMISD cap index. 

The fund comes under the Article 8 category of the EU's Sustainable Financial Disclosure Regulation, which integrates ESG criteria into it to shield against greenwashing. The investment team believes that environmental, social and governance analysis is a vital part of the investment process. 

The investment team expects the majority of the portfolio to be invested in companies that are already managed sustainably, with the remainder to be invested in companies with the potential for improvement through engagement. The team will also engage with poorly rated companies, encouraging them to improve ESG disclosure, further integrate ESG into governance and strategy, and set clear objectives.

Based in London, Bignell joined the QUAERO CAPITAL European small and mid caps management team in 2021. With an average of 23 years of experience, the Quaero Capital European equity team manages several funds in this asset class, in particular the flagship fund Argonaut, which focuses exclusively on European microcaps. 

According to the firm, European small and mid-caps are an interesting market segment. They have beaten large caps in every 10-year period since 1999, whether in the down or the up years. 

Welcoming the move, Jean Keller, CEO of QUAERO CAPITAL said:“This new active and concentrated strategy fits perfectly with our specialised ‘away from the crowds’ management philosophy.” 

“Despite or perhaps thanks to the current economic and geopolitical uncertainties, the moment seems particularly favourable to us. Indeed, not only are there currently many opportunities to be seized, but active management regains all its interest in an environment where interest rates are positive again and we are able to make objective relative choices once more,” Keller added.