Small Caps: The latest choices for management stars

Everywhere in Europe, small values are reappeared

Small French and European capitalizations continue to outperform. Consequently, The time for catching up has finally arrived. Meanwhile, a phenomenon encouraged by the domestic anchoring of SMEs and eti listed in the face of the uncertainty of customs duties, the instability of currencies and a tumultuous geopolitical environment. Furthermore,

In France, small values take revenge on the averages, the CAC Small pointing at the end of June to +30% (dividends included) against +13% for the CAC Mid index. Meanwhile, A difference reduced to around 4 points when comparing median performance. Moreover, A few large weighting stamped defense has indeed gave a boost to the CAC Small index. In addition, masking the existence of many components still trained, in particular in distribution (Casino, Maisons du Monde, Future Telecom) and in health (Cegedim, Guerbet, Biotechs, etc.). Meanwhile,

In Europe, the Stoxx Europe Small EX UK NR index increased by 10.9% on the semester and the MSCI EMU micro -cap net index Return and increased by +13.7%. Similarly, Online performances with the French asset class. Similarly, there too with a more marked rebound in the smallest capitalizations, unlike what we have been observing since 2021.

Evolution, dividends included, indices of French shares by capitalization size since 1is January 2025

In terms of valuations, the discount of small and medium values remains significant (> 20%). Nevertheless, What promote the still very recent takeover of the collection of specialized funds (> € 400 million since May 2025). Consequently, A few days before the publications of half -yearly results. Moreover, it remains to be seen whether the beneficiary dynamics will become higher on the side of small values, and this from 2025 as the consensus seems to be expected (+8% for the benefits by median action for the CAC M&S is twice as much as the CAC 40, according to Portzamparc/Facset). Therefore,

Evolution, dividends included, indices of French shares by capitalization size over 10 years slippery at 07/15/2025

On the front of financial operations (recently on Cogelec and Waga Energy), the pace is slightly less sustained than last year “probably in reaction to the increase in uncertainties linked to American policy (customs rights, geopolitical situation)” according to Jean-François Delcaire, lover of special situations which remains “very convinced and thinks that it is only a question of time for the smallest values, carried by the return of interest of investors and that the initiators of financial operations get used to the volatility of American decisions ”.

Finally, let us salute the IPO in early July of Semco for the quality of its fundamentals, the over-registration and its market performance from its first day of quotation (+47% small caps: latest choices management vs IPO cours). Consequently, Hopefully this operation announces others. For example, the number of newcomers to the Paris Stock Exchange this year being lower than what was announced by certain intermediaries and that can be observed elsewhere in Europe, in Italy for example.

(Source: Quantalys, monthly report for management companies)

In general, we note that:

• The selection funds displayed a 2025 performance of +19% on average at the end of June, which is clearly above the asset class. The Independence Europe Small and Tailor Actions Entrepreneurs are largely in the lead with performance of 33% and… +39% respectively! The latter took advantage of very domestic sectors such as defense, engineering, construction or even finance.

• Among the very detained or recently bought files bought by our selection of funds, we notably identify GTT, Wavestone, Aubay, EXAIL, EXOSS, NEURONES, ROBERTET, Jacquet, Thermador, Trigano, Travelers du Monde, Guillin, Reway, Technip Energies, Tecnicas Reunidas, Mayor Tecnimont, Saf-Holland, Theon International and Theon International and Theon International and Theon International Group Vuse. New companies appear by several funds such as: Compagnie des Alpes, Sales-United, Alten or Quadient.

• Note that funds collect and increase the number of their positions.

The last arbitrations of the pros

• Independence Europe Small (+33% at the end of June) continues to benefit from its good choices of values and sectoral, the fund being strongly weighted in domestic values (engineering and construction, construction materials, defense represent 40% of the fund). The outstanding the fund has further increased by a small caps: latest choices management dozen percent in June, to exceed € 660 million. The median capitalization exceeds one billion euros. Additionally, the fund has expanded to 66 the number of its positions, leaving the first positions to dilute, sometimes for valuation reasons (e.g. Theon International deemed now “well valued”). The PER Médian amounts to 10.4 (12.3x on average weighted) or a third of the discount compared to its reference index. Note the entry of the fund to a Spanish automotive supplier with extraordinary financial performance: CIE Automotive. The fund also entered a new player in engineering. construction, the Portuguese Mota-Engil as well as in the Synsam (Sweden) optical company.

• Independence France Small & Mid (+20% at the end of June) was strengthened in TF1 following the purchases of Bouygues and the agreement with Netflix. He also entered the company of the Alps. probably hoping for an improvement small caps: latest choices management in the return to invested capital, historically disappointing. The fund also entered the United States, whose return to capital employed with moderate valuation multiple certainly convinced the managers. CIE Automotive has also been integrated into the fund.

• Gay-Lussac Microcaps Reinforced neurons, “whose positioning we appreciate in a context of limited visibility for the ESN sector. We have also accumulated argan titles. whose activity and valuation of the portfolio should benefit from the decline in rates in Europe. Finally, we have completed our Precia line, a company which in our view always has potential for improving margins. The group recently sold its non -profitable commercial weighing activity and signed a notable partnership with the Glencore group. Furthermore. a probable cancellation of part of the self -control is not to be excluded following the vote of a resolution in this direction during the small caps: latest choices management general meeting in late June. On the sales side, we died our Fope line. Our title revaluation scenario materialized, the transfers were intended to respect our risk budget. We have also lightened our position in Cembre which continued its increase and whose valuation has thus become more demanding. Finally. we have reduced our Guillin group line, because we fear in particular a dilution of the return to capital employed with the rise of the cardboard, more intensive in capital than plastic ”.

• Mirabaud Discovery Europe ( +17% in 2025 in Euros +22% in GBP) In June benefited from the performance of the Swiss industrial Cicor Technologies “whose successful acquisitions brought the group’s share in the manufacture of electronic components for aerospace and defense at 40 % of its turnover. The company is also a market leader in the small caps: latest choices management manufacturing of electronic components for hearing aids. intended to improve the quality of life of many people ”. The fund has strengthened its “position in the Spanish manufacturer Neinor Homes (4.7% of the fund) in order to finance the acquisition of its counterpart Aedas. to take the lead in the real estate construction sector in Spain. Spain. like many other European countries, is faced with a shortage of housing and Neinor Homes offers a solution to this crisis thanks to energy -efficient housing. While the many crises that Europe has gone through erase. new challenges emerge, we observe a certain resilience and see opportunities. Inflation is starting to slow down. European central banks soften their policies, but monetary tightening persists on a global scale. We therefore remain vigilant. »»

• HMG Discovered PME C Has reinforced Mr Bricolage (which should be small caps: latest choices management able to benefit from the best climatic conditions of the second quarter), on Equasens (software) which has just concluded a new acquisition in the application sector for the hospital world, on world travelers (which confirms to outperform its sector thanks to its two segments of tailor-made and adventure) or more annoying, on Delfingen, Maintain pleasant margins despite the context that is not carrying its sector. Three lines were sold: HF Company (telecom networks) taking advantage of the liquidity of its market just before its very beautiful dividend. Lacroix (electronics) and Cogelec (access control) given a valuation that has become very generous.

• HMG Discovered C Completed its “purchases of securities from the building-renovation sector (Thermador, SFPI) when it is confirmed that the number of transactions of old housing finally resumes significantly. In the council sector. the lines in aubay (which has small caps: latest choices management just finalized an important and very complementary acquisition) and in neurons have also been reinforced. On the discretionary consumption side. we can note a strengthening in Fnac Darty (before its progression) and in Lagardère (edition of books, shops of stations and airports). Finally. the position in the company Holding Company of Cambodia has been completed again, while we are now accompanied in our purchases by the Bolloré group to judge the current valuation extremely attractive. We have also initiated a stone & holiday position – Center Parcs, which is probably not necessary to present. This group that we have long owned. presents today a much less risky model (outsourcing real estate development) and completely desendted. Its valuation remains very reasonable when its management says it is thinking about strategic options given a shareholding that. can seek global liquidity. Profits have mainly focused on the aeronautical sector. sovereignty after its powerful small caps: latest choices management rebound: the Lumibird line was lightened while those in Odyssey Technologies and OVH (Cloud) were ended (the latter fortunately just before a very disappointing quarterly activity). Most of the position in ETPO was also sold in excellent conditions (19% more expensive than the price of OPA). »»

NB: Funds were selected according to their long -term performance (we have retained a period of 5 years, a duration generally retained for investment in combination funds), their volatility and their high weighting in small French values (minimum 20% of the fund).