Hargreave: Small-cap bull run will cool in 2013

Marlborough's top-performing fund manager Giles Hargreave has admitted it will be difficult for UK small-cap equities to replicate their 2012 performance this year.

Hargreave, who manages the £588m Marlborough Special Situations fund, said valuations across small-cap stocks look stretched after a strong run last year. The FTSE Small Cap index returned 27.8% in 2012, but Hargreave said this was simply a recovery-led rally. “Last year small caps had a great year, but it is unrealistic to expect these sorts of returns again in 2013, as a lot of recovery stocks which had been really beaten up massively outperformed,” he said. “Thomas Cook, for instance, jumped from 15p to 90p, but there is no chance it can continue going up another six times this...