The European Micro Cap Space
Historically, the MSCI European Micro Cap index has outperformed the broader stock market indices. Yet allocation of capital and attention to Micro Cap stocks has decreased in recent years driven by the introduction of MIFID II, asset concentration among top tier asset managers and inflow into passive stocks indices.
The Micro Cap space is large with over 2.600 names included in the MSCI European Micro Cap index. The segment is under-researched, have limited liquidity and the market capitalizations can typically not accommodate the size of investment required by larger asset managers and institutional investors. Combined creating the most inefficient area of equity markets.