Eleva Leaders Small & Mid Cap Europe

Why ELeva for European Small & Mid Cap equities?

The Eleva Leaders Small & Mid-Cap Europe Fund is active and conviction based with a dynamic stock picking approach. Diane Bruno and Marie Guigou, the two former lead portfolio managers of the Mandarine Gestion European Small & Mid-Cap fund have decided to join Eleva at the end of 2018. They build up a very impressive track record at Mandarine Gestion, which they continue at Eleva.

Candoris works together with Eleva Capital, an employee owned Asset Manager focused only on European Equities based in Paris.


Eleva Capital, the firm:

  • Founded in 2014, focused exclusively on European equities
  • Concentrated strategies


The Fund’s Investment Philosophy is based on two core convictions, which underpin the two-stage investment process of the Fund:

  • There is a high concentration of Leaders among European small & mid-cap Companies. Leadership is a source of competitive advantage for a Company, which underpins its ability to grow earnings in a profitable and sustainable way over time and can command a valuation premium over time.
  • In the medium to long term, the share price performance of a Company is driven by its ability to grow earnings in a profitable and sustainable way, with quality growth profiles generally commanding an increase in their valuation multiple overtime.

In the investment process, the Fund Managers first apply a qualitative and proprietary filter to the vast investment universe of European small and mid-cap Companies, which consists in selecting Leaders. As such, they focus on three Leadership criteria that have emerged through their experience and constitute a differentiated first step approach to stock-picking being:

  • Listed leadership. When a Company has no listed competitor in Europe, it will be the only listed European vehicle to have access to a specific niche market or business segment. Being listed on the stock exchange generally constitutes a source of competitive advantage in terms of financial means and brand image. Moreover, the exclusive profile of the Company can command a valuation premium.
  • Global leadership. When a Company has global market shares of more than 20%, it is usually a much bigger player than its competitors or a player in an oligopolistic market. In any case it generally enjoys high pricing power, which is key in order to protect margins overtime and grow in a profitable way.
  • Specific leadership. When a Company derives the majority of its earnings from one specific geography in which it enjoys high local market share, from one specific end-market or from one specific technology that drives differentiation vs peers, it is generally the purest way to capture a specific market dynamic.

In order to qualify as a Leader, a Company must meet at least one of the three above Leadership criteria. This universe of Leaders constitutes an eligible investment universe of Companies, which forms the basis of the stock-picking step of the investment process.

In that second step of the process, the Fund Managers aims to select the big caps of tomorrow, ie Companies that will grow into their market capitalisation on the back of profitable and sustainable growth credentials. As such, the Fund Managers have identified five growth levers that they believe underpin a company’s earnings growth profile.


Innovation. The Fund Managers believe that a Company’s ability to innovate is a prerequisite to gaining market share and growing in a sustainable way.


Internalisation. A Company’s ability and capacity to expand its products or services outside its domestic market constitutes a source of growth, generally first in revenues, and progressively in earnings as the Company leverages its local and/or global scale.


Regulation. As it creates barriers to entry and pricing power, regulation can be a growth driver.


Acquisitions. The Fund Managers also look at a Company’s ability to consolidate its sector by pursuing external growth opportunities. When a Company has a solid balance sheet, and has demonstrated a solid track-record in terms of integrating past acquisitions: acquisitions can be viewed as a growth opportunity, not only in the short term via combining revenues and earnings, but also in the longer term as cost and revenue synergies tend to provide additional earnings growth overtime, independently from the macroeconomic or underlying cycle.


Specific cycles. A Company’s whose earnings are dependent upon a specific cycle can constitute a source of growth when that specific cycle is growing.


The Fund Managers generally have higher conviction in companies that exhibit a diverse range of growth drivers as it tends to underpin a more visible and sustainable growth.

Eleva Leaders Small & Mid Cap Europe Fund Documents