Small caps: how to ride the recovery wave of UK equities

Professional investor Ken Wotton highlights British small caps that hit the sweet spot of the British equity market

City of London financial district with Royal Exchange building
(Image credit: Alexander Spatari via Getty Images)

British small caps have demonstrated remarkable resilience, outperforming blue chips over the past year. Fuelled by a surge in takeover activity, investors’ interest in the sector has ignited – yet stocks remain materially undervalued. With a backdrop of anticipated interest rate cuts and a new government committed to stability, we believe the stage is set for investors to capture long-term growth in this asset class. 

Our focus is on this “sweet spot” of UK equities. By taking significant stakes in our holdings, we can use our private equity expertise by engaging with firms’ boards to support value creation. This approach enables us to curate a concentrated portfolio of exceptional companies in structurally growing sectors.

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Ken Wotton

Ken Wotton is lead manager of Strategic Equity Capital plc and Managing Director, Public Equity at Gresham House and leads the investment team managing public equity investments. Alongside this, he is manager for WS Gresham House UK Micro Cap Fund, WS Gresham House UK Multi Cap Income Fund and manages AIM listed portfolios on behalf of the Baronsmead VCTs. Ken graduated from Brasenose College, Oxford, before qualifying as a Chartered Accountant with KPMG. He was an equity research analyst with Commerzbank and then Evolution Securities prior to spending the past 12 years as a Fund Manager at Livingbridge and now Gresham House specialising in smaller companies.