What is International Micro Cap?
We broadly define the investable International Micro Cap market as the smallest 2.5% aggregate in market capitalization from 22 of the 23 developed markets (ex US). These companies number over 5,000, range in capitalization size from $30M to $850M, and trade on the major exchanges in the developed countries.
We believe that International Micro Cap companies are very inefficient and are an underinvested area of the world equity markets. International Micro Cap securities have an average of one analyst per stock versus an average of 24 analyst for Large Cap. Numerically Micro Cap companies represent 80%+ of the universe, yet only a fraction of invested AUM.
International Opportunities Approach
THB has been focused on less efficient areas of the public markets for over 35 years. Our clients include corporations, endowments, pension plans and family offices. THB’s nine-person investment team works collaboratively to discover and research opportunities which meet our philosophy.
We aim to construct a portfolio of high quality, self-funded, low risk companies with valuation metrics similar to or lower than the benchmark, yet with superior long-term operating characteristics. THB believes the best companies can grow their businesses organically and via acquisitions using internally generated cash flows. Debt should be kept to a minimum with a preference for companies that retire shares outstanding.
THB believes that International Micro Cap companies are very inefficient, and that a focused portfolio of high-quality securities can offer superior risk-adjusted returns.
Our portfolio typically holds 150 securities from the approximately 5,000 securities within the investable International Micro Cap universe (22 of 23 developed markets – ex US). Stocks must first pass stringent rejection criteria before being considered for the portfolio.
Why Choose International Opportunities?
THB’s proprietary Risk Grade, Quality Assessment, debt levels, retained earnings and earnings consistency are all factors which are used to reject less qualified securities. We will maintain broad country, economic and sector diversification. Our style is core with elements of both growth and value.
Founded in 1982, THB Asset Management “THB” is a 100% employee-owned, boutique firm that has been managing equity strategies for more than three decades. Our competitive advantage comes from our long history successfully investing in the smallest sized companies within the U.S. market.
The collective intelligence of our team is invaluable for creating risk averse, high alpha portfolios. Our understanding of the key drivers of Micro Cap returns has allowed us to create an approach that mirrors the process of our very successful US Micro Cap product. Our Risk Grading, Quality Assessment, and rejection criteria are identical to those utilized in our US Micro Cap approach.
Our firm values innovation and we utilized inventive solutions to provide our clients with diversified, risk averse access to the smallest and most inefficient International Equity Markets. We launched one of the first U.S. Microcap Strategies in 1998 and are now one of the few firms that can provide an International Micro Cap strategy with full integration of ESG (Environmental, Social and Governance) factors to investors.