Charles Montanaro quips that setting up a fund management group focusing on small quoted companies in the middle of the last recession was, perhaps, a moment of madness. With turnover at £6.6m and profits at £3.3m, it doesn’t really look that way. With a history in investment banking, including stints at Apax and Dean Witter Reynolds, Montanaro had spotted an opportunity to help big institutions invest in small quoted companies in UK and Europe. “Small companies can grow faster than large ones, so returns tend to be quite high. But you need to meet the company and the management and do the research yourself, which is very labour intensive.” Large institutions that were cutting costs and staff could see the value in a dedicated service. Established in 1991, the firm now has a team of 22, investing primarily on behalf of insurance and pension funds. The first fund was £10m in size, and until recently, that had increased to £1bn. For Montanaro, the future is positive, not least because recent FSA requirements have increased barriers to entry to the market. Add this to the fact that “some of our competitors will not be around in 12 months’ time”, and you can appreciate that Montanaro expects things to look “an awful lot better for those that survive”.


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