Cédric Le Berre
Senior Analyst & Investment Specialist
Small and mid caps
Exploiting strong growth potential with market leading companies: a well-curated portfolio of high-quality small and mid-cap (SMID) businesses has the potential to deliver above-average returns over the medium to long term
By employing a meticulous "bottom-up" stock selection methodology, we follow a "Quality At a Reasonable Price" (QARP) investment style. This means investing in businesses of exceptional quality while ensuring that we do not overpay for them. We place a strong emphasis on companies that meet our high-quality threshold, which includes factors such as financial strength, consistent profitability, and a robust commitment to environmental, social, and governance (ESG) principles. We also actively seek out mispriced stocks within this sector, identifying companies whose current market value does not reflect their quality.
Cédric Le Berre, Senior Analyst & Investment SpecialistOur investment philosophy revolves around identifying superior small and mid-cap companies that possess sustainable competitive advantages and consistently generate above-average returns on capital. Our approach focuses on evaluating investment merit based on prospects, quality, and valuations.
The SMID segment presents an exciting opportunity as it is relatively under-researched. It provides access to well-established companies with strong fundamentals, including a solid market share, healthy margins, and stable/predictable profits, all at reasonable prices.
We believe that SMID cap markets are much less efficient compared to broader equities. One primary reason for this is the significantly lower level of analyst coverage among SMID caps relative to large caps. As long-term investors, we capitalise on these inefficiencies, frequently finding compelling investment prospects that offer attractive returns through a combination of valuation rerating and earnings compounding.
Global SMID Cap definition and investable universe
Generating consistent returns with SMID caps
UBP's investment specialist and fund selector, Cédric Le Berre, talks with Ned Bell, CIO of Bell Asset Management, about the benefits of partnering with UBP and the momentum he sees in global small- and mid-cap equities.
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27.03.2024
Four reasons to consider global SMID caps in 2024
As the “Magnificent 7” generate risks in the segment, diversification within equities becomes key. Global small- and mid-cap (SMID) stocks, represented by the MSCI World SMID Cap Index, are emerging as a compelling option.
25.02.2021
UBP’s small- and mid-cap capabilities
SMID-cap equities are poised to mean revert and outperform over the next three to five years. The best time to allocate to SMID caps is when earnings are “depressed”, i.e. now.
14.12.2020
The case for Swiss and European SMIDs
L'Agefi (04.12.2020) - Small- and mid-cap companies (SMID caps) have traditionally delivered superior long-term growth and returns than large caps. They also allow investors to gain exposure to key secular trends. However, finding the most promising companies requires a highly disciplined selection process.