Amati UK Listed Smaller Companies: July 2026 Fund Update

• Amati’s co-founder, Dr Paul Jourdan, has been investing in smaller companies for over two decades

• The fund aims to provide broad exposure to growing but established smaller companies listed in the UK

• Long term performance remains strong, but returns have been poor over the last five years with the fund underperforming the IA UK Smaller Companies sector average in each of the last four years

How it fits in a portfolio

The Amati UK Listed Smaller Companies fund aims to achieve long-term growth by investing in the smaller parts of the UK stock market. Companies of this size are often overlooked by analysts, meaning there are opportunities for investors prepared to scratch below the surface. The fund could add diversification to the UK portion of a more adventurous portfolio, or one focused on larger, more established businesses. Its growth focus could also complement other more value orientated investments backing out-of-favour value companies.

We removed the fund from the Wealth Shortlist in April 2025 following a sustained and significant fall in the level of assets managed by the business.

Manager

The fund is managed by Dr Paul Jourdan and Gregor Paterson.

Dr Paul Jourdan co-founded Amati Global Investors in 2010 and was initially the sole manager. His fund management career began in 1998 and he’s since built up a wealth of experience analysing companies listed both in the UK and around the world. Jourdan is also the chief executive of Amati Global Investors.

Gregor Paterson joined the business in July 2024 and has over two decades of experience working in the UK smaller companies space, both as an analyst and a corporate broker. He took over from Scott McKenzie, who had been co-manager on the fund and retired at the end of December 2025.

McKenzie’s departure follows the retirement of experienced co-manager David Stevenson at the end of March 2025, and departure of analyst Dr Gareth Blades. Stevenson remains a director of Amati.

Process

The team’s process centres around detailed company research, capitalising on the manager’s decades of small cap experience. They look for established, financially robust companies with talented management teams. They avoid speculative, highly indebted companies and those that lack the edge to compete with larger, better resourced businesses.

This analysis whittles a universe of around 350 companies to a final portfolio of currently 41 holdings. They invest where company share prices look attractive when compared with what they believe are the growth prospects. The team invest with the long term in mind. They start by investing 1-2% of the fund in each company and, if desired, build this over time to a maximum of 5%. Investments that exceed that size are trimmed. Other factors such as poor governance, a fading outlook or finding a better alternative will also trigger a sale.

Since 2024, the managers have made a number of changes to how the fund is managed. This includes investing less in the very smallest listed companies in the UK and making the portfolio flatter by reducing some top position sizes. More recently there has been a decline in the number of holdings within the fund, which was as high as 80 companies back in 2021 but has moved closer to 40 over the last couple of years.

Today the fund has relatively little exposure to micro-cap stocks, with just 2.5% invested in companies less than £100 million in size and a further 13.9% in companies worth less than £250 million. Recent additions to the fund include defence group Chemring, identify software business GB Group, software consultancy Kainos, asset finance software provider Alfa Financial Software and industrial textile specialist Coats.

Culture

Amati Global Investors, the manager of the fund, is owned by its employees, and all staff are encouraged to invest in it. This means the managers and staff have their interests aligned with those of the business as a whole and of investors.

The fund has reduced in size due to significant outflows in the last 12 months, and the firm has also lost the mandate to oversee the Maven Renovar VCT, formerly the Amati AIM VCT. Firm assets under management have fallen to a little over €300 million as a result. That has been accompanied by the departure of several staff members.

ESG Integration

Amati’s fund managers consider a number of ESG-related issues in their investment process, including issues arising from supply chains, climate change and contamination, unequivocal social negatives such as profiting from addiction or forced labour, board membership, remuneration, conflicts of interest (such as related party transactions), business leadership and culture.

The company also adopts a Clean Trade approach, which means avoiding companies that support the most oppressive regimes and engaging positively with those that uphold Article 1 of the International Covenants on Civil and Political Rights, particularly in relation to the extraction of natural resources.

Amati fund managers and analysts actively engage with the companies they invest in, and the team uses all votes. A quarterly voting record is published to the firm’s website, although there is little in the way of rationale.

Investors should note that this fund has one of the highest ESG risk profiles of the funds under research coverage. The companies within the fund could therefore face increased regulatory scrutiny, reputational damage, and operational challenges, potentially impacting the fund's future performance.

Cost

The fund is available for an annual ongoing charge of 0.91%. The HL platform fee of up to 0.35% per year also applies, except in the HL Junior ISA, where no platform fee applies.

Performance

The fund’s long-term performance is strong with the fund significantly outperforming its benchmark since Paul Jourdan became manager. However, it’s been weaker in recent years with the fund underperforming the IA UK Smaller Companies sector average in each of the last four years. Past performance isn’t a guide to future returns.

Over the last 12 months, the fund has delivered a return to investors of 0.9%*, failing to keep up with the 8.1% average return from the IA UK Smaller Companies peer group.

Our analysis suggests that the fund’s investments in the industrials sector in particular proved a headwind to its performance over the year. Having less invested in consumer defensive stocks was also challenging for performance. There were some positives though, and the fund’s investments in basic materials companies like miners were a particular strength aided by strong results from gold and silver miners Greatland Resources and Hochschild.

Investing in smaller companies is higher risk and investors should invest for the long term and be prepared for volatility along the way.