It is every small investor's dream: to find the shares of an inconspicuous mini-company that will become the next Apple or Microsoft. Always unrealistic, but there is nothing wrong with investing in such companies. At least that's what Jonas Liegl, manager of the “Micro Champions” fund of the Lupus alpha fund company, thinks. Even if the problem starts with saying exactly what a “micro cap” actually is in contrast to a conventional “small cap” - how small can it be? “That varies, including with the ratings,” says Liegl. “The guideline is currently a market capitalization between 50 and 750 million euros.” But the size is not the most important thing. First of all, a company has to be investable at all. For Liegl this means first and foremost:There must be a corresponding reporting system in English. Of course it is not. In France, for example, this is usually only to be expected from a market capitalization of one billion euros.

Martin Hock

Editor in business.

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Nevertheless, Liegl has no shortage of investable companies.

His universe includes 1,700 companies, from which he selects around 90.

35 percent of the companies are listed in Great Britain, 15 percent in Sweden.

Germany comes in third with around 10 percent - what is actually a tragedy, says Liegl.

However, since, as is usual with Lupus alpha, he designs his fund from the bottom up, this results in a different weighting.

Germany is in the lead with around 24 percent, followed by Sweden with 17 percent, while British micro caps only make up 13 percent - despite the English language.

The disrupted supply chains are currently a major issue. “Small companies often don't get containers for their products or no space on ships. That is definitely a disadvantage compared to large, international corporations, which have better access here. "For Liegl, this means directing a strategic view of outsourcing companies - those that offer new projects with local partners on site, such as the Finnish Incap or the Swedish Note AB. Incap assembles circuit boards and has its production facilities in the Baltic States. "European outsourcing partners benefit from a 're-shoring' to Europe in order to shorten the supply chain," says Liegl. “You get a lot of new projects that were previously carried out in China. And this development is only just beginning.“However, the ratings have already risen significantly: Note's price has risen by more than 60 percent since mid-October, and Incap's by more than 40 percent.

Liegl particularly likes long-term customer relationships that generate recurring sales. On the other hand, he finds capital-intensive companies such as banks, steel companies or automotive suppliers less attractive. The highest risk level for him are companies that are in the research or product development phase. “There are too many unanswered questions.” Early phases are more something for venture capitalists. You yourself are always only a minority shareholder, so companies should have a certain degree of maturity. “It should be proven that the business model is viable and that the company can grow on its own. Then we'd like to inject more capital. A good product alone is not enough. "

Liegl wants a well-quantifiable profit perspective for the next five years, even if one then leaves earnings behind in individual cases.

But the laboratory equipment supplier Sartorius or the large kitchen manufacturer Rational were once classic micro caps.

Rational went public with a product and an enterprise value of 350 million euros.

Today the company is worth ten billion euros.