Where now for European smaller companies?

At first glance, European smaller companies look expensive. They trade on a two-year forward earnings-per-share multiple of 15.8x, against their 15-year average of 13x.

But headline valuation multiples never tell the whole story and there is plenty of outperformance still to come from the smaller asset class.  This opportunity is driven by a broader choice of investments, faster growth of niche market leaders and greater mispricing from lower investor focus.  Where are the best opportunities for small-cap managers globally? There are about 1,200 liquid European smaller companies (defined as €250m-€5bn market capitalisation) compared with roughly 400 larger European companies (>€5bn market capitalisation), which makes this space a fertile hunting g...