The hidden opportunity

Amid the tariff storm unleashed by the Trump 2.0 administration, investors have begun to question the narrative of U.S. exceptionalism. Despite a recent rebound, both the U.S. equity market and the Magnificent Seven have significantly underperformed global markets since the start of the year.

What has gone largely unnoticed, however, is the continued neglect of small caps worldwide. These companies now trade at their lowest relative valuations versus large caps in the past five years. At ECP, we see compelling opportunities in this space and have recently added or increased exposure to several quality, undervalued businesses in our House Funds. In the European Value Fund, for example, we are invested in mid- and small-cap names such as Gerresheimer, Kion, Bawag, Zehnder, and Pets at Home.

Our opportunity set spans over 1,500 listed companies across Europe. We deploy capital where we find undervalued earning power—regardless of market cap, sector, or geography. This is the essence of our active, bottom-up investment approach.

Feel free to reach out if you’d like to learn more.