Executive Summary
Alken Fund Small Cap Europe has drawn increasing attention among long-term equity investors for one core reason:
It offers pure, high-conviction exposure to European small-cap equities, a segment where active management can still meaningfully outperform due to structural inefficiencies, limited analyst coverage, and elevated dispersion of returns we have here in Europe. ποΈβοΈ
Name: Alken Fund Small Cap Europe β Class A
ISIN: LU0524465548
Asset Manager: Alken Asset Management
Fund Structure: UCITS SICAV (Luxembourg)
Fund Type: Active Equity Fund
Asset Class: European Small-Cap Equities
Share Class Currency: EUR
Launch Date (Fund): 2009
Since inception, the fund has delivered strong long-term capital appreciation, materially outperforming its benchmark, the MSCI Europe Small Cap Index, although with higher volatility and periods of pronounced relative drawdowns. ππ
What can bring up to our mind coulbe be that it is simply a βhigh-risk small-cap fund.β
Nevertheless, a more accurate conclusion is that this strategy profile reflects not factor exposure or style drift, but deliberate concentration, fundamental stock selection, and a willingness to deviate sharply from the index.
In summary, Alken Fund Small Cap Europe is a pure-play European small-cap equity strategy, investing in listed companies across developed European markets with smaller market capitalisations.π§ ποΈ
How the Strategy Works
Source: Alken Asset Management
Stock selection is driven by detailed analysis of cash-flow generation, balance sheet strength and capital allocation discipline. The strategy blends value and quality considerations, favouring businesses with resilient economics and identifiable catalysts for re-rating, while maintaining strict discipline on leverage and downside risk.
Portfolio Snapshot
The portfolio reflects the managersβ highest-conviction ideas across small-cap equities, leading to significant country and sector deviations versus the MSCI Europe Small Cap Index.ππ
See the comparative below;
Source: Alken Asset Management
We can say that the geographical exposure approach focuses mainly on industrial companies and also on the financial sector, also having a slightly higher weight in these sectors compared to the index.
Risk, Performance and Expectations
Historically, the fund has generated fairly solid returns compared to its benchmark index, with performance driven by stock-specific alpha rather than market beta.
Source: Alken Asset Management
Looking ahead, returns will depend on the normalisation of European small-cap valuations and the continued execution of the managersβ fundamental approach.
Source: Morningstar. Data in EUR
You can notice the excellent performance of the fund through the years, while short-term returns can be volatile (as expected in small-cap equities) the longer-term figures reinforce the effectiveness of the strategyβs fundamental, bottom-up investment process. The progressive normalisation of returns over longer horizons is consistent with a strategy designed to capture structural mispricings over time, rather than short-term momentum, and supports the case for viewing the fund through a long-term investment lens.ππ‘οΈ
Disclaimer: Due to the last yearβs excellente perfomance, subscription terms and availability of this fund may be subject to restrictions, including potential soft-close measures. You should check this directly with the fund manager or the official distributor before making any investment decision.
Source: Finect. Data in EUR
On the other hand, this set of metrics highlights the quality of returns generated by the strategy over the last five years. The combination of a high annualised return, moderate volatility, and a Sharpe ratio above 1 points to strong risk-adjusted performance. A beta below 1 suggests lower sensitivity to market movements, while the elevated alpha and information ratio confirm that returns have been primarily driven by active stock selection rather than market exposure. π§π
The Manager Behind the Fund
The fund is co-managed by Nicolas Walewski and Marc Festa, combining strategic oversight with hands-on portfolio execution:
Nicolas Walewski, Founder and Chief Investment Officer of Alken Asset Management, is the historical architect of the firmβs investment philosophy and has been instrumental in shaping its high-conviction, fundamentally driven approach to European equities.
Marc Festa, a senior portfolio manager with experience in European equity markets dating back to 2005, is responsible for the day-to-day implementation of the Small Cap strategy, leading stock selection and portfolio construction
Why Look at This Fund?
Alken Fund Small Cap Europe β Class A offers exposure to a segment of the equity market where active management remains highly relevant. As a satellite allocation, the fund provides differentiated exposure to European small caps for investors willing to accept volatility in pursuit of sustained alpha.β³π―
Who is this fund for? The strategy it would be suited for investors with a long-term horizon who can tolerate interim drawdowns in exchange for differentiated alpha potential.
What do you think? Would you invest in this fund?
Do you hold this fund in your portfolio already?
Please, let us know in the comments.π
Finally, I leave you here with another in-depth and enlightening analysis of this fund by Manuel Ritsch of the βInversiΓ³n Sensata Podcastβ.
Manuel Ritsch | @manuelritsch
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