407. Why patient investors are still backing UK smaller companies

UK small-caps have endured a difficult decade, but attractive valuations, stronger balance sheets and improving earnings trends are creating a compelling backdrop. Our interview with Katen Patel, co-manager of the JPMorgan UK Small Cap Growth and Income Trust, explores what could finally trigger a re-rating, why M&A activity is accelerating, and how share buybacks have become increasingly attractive for cash-rich companies. He also covers opportunities in UK mid-caps, the benefits of an investment trust structure, overlooked companies at the smaller end of the market and the importance of international revenues. Finishing with how the portfolio balances capital growth with income.

What’s covered in this episode:

• A decade of UK small-cap challenges
• What could trigger a re-rating
• Valuation discounts versus the US
• Four Imprint’s international growth
• Small-cap dividend yields
• Rising M&A activity
• Private equity interest
• The shortage of new IPOs
• Why share buybacks are rising
• UK mid-cap opportunities
• Investing below £300 million
• Finding under-researched companies
• International revenues in UK small-caps
• Capital growth versus income
• Record free cashflow yields

Learn more on fundcalibre.com

Please remember, we’ve been discussing individual companies to bring investing to life for you. It’s not a recommendation to buy or sell. The fund may or may not still hold these companies at the time of listening. Elite Ratings are based on FundCalibre’s research methodology and are the opinion of FundCalibre’s research team only.