Active fund management: an industry that turns customers away?

Two themes recur on this blog:

1. My building of a SIPP portfolio for 2042, to cover potential care costs when I turn 75.

2. My frustration at the lack of non-UK micro-cap investment strategies accessible to me as a UK retail investor.

As has become usual since 2022, the spring/summer period involves a search for new SIPP investments for the allocation of the £2880 (plus £720 tax relief) contribution limit applicable in the UK to someone under 75 and not in paid employment.

In searching the database of the retail platform I use (AJ Bell) I was intrigued to see the Berenberg European Micro Cap Fund seemingly available to invest in.

Why micro-caps at all? Because as Kepler Trust Intelligence reports, between 1955 and 2025, UK micro-cap stocks returned 15.6% a year, small caps gained 14.1%, mid-caps 13% and large caps 11.2%.

As this SIPP portfolio is a long-term endeavour, stretching to 2042, and in part a real life experiment in the relative merits of small cap investing, value investing, and mitigating political risk through geographical diversification, I was eager to explore how ‘micro’ this European Micro fund actually was before investing. 

I already hold estimable UK micro cap trusts such as River UK Micro Cap and the Onward Opportunities Trust, and given ever-intensifying UK political concerns, I wanted some geographical diversity within micro-caps.

Encouragingly, according to Morningstar’s portfolio analysis of the European Micro Cap fund, the fund's holdings were smaller than most: 56% being classed as ‘small’, 44% as ‘micro’ in Morningstar’s categorisation; with an average market cap of 489m Euros.

This is a significantly smaller small cap fund than an obvious alternative such as The European Smaller Companies Trust.

According to Morningstar, this trust's portfolio is weighted a little higher up the market cap scale: 

46% small; 23% micro; average market cap 1.35bn Euros.

Although the medium term performance of the Berenberg fund has not been stellar, down 6% over 5 years, more recently it has improved, up 20% in the year to May 15^th 2026.

I initiated a small buy order through the AJ Bell Platform, as the fund appeared available to purchase. A couple of days later, to my great surprise, I received this reply:

“Please be advised that your order to invest into Berenberg European Micro Cap Fund M has been rejected by our dealers as this fund is currently not set up on the platform. For our team to enquire into setting this up, we have a minimum commitment of £85,000 to invest should we be successful.”

Given the annual SIPP contribution limit of £2880 (about which more in a future blog) the fund thus lies beyond my investable universe.

It's not entirely obvious whether the £85,000 minimum comes from AJ Bell or the fund management company (Berenberg/Universal Investment Luxembourg), and for the purposes of this blog it doesn’t matter.

The Berenberg fund (and AJ Bell) may feel relieved to not have to deal with a measly £1000 or £2000.

But when you consider that under current SIPP limits I have 15 more years of SIPP contributions to come, up to £54,000 of investment over the next decade and a half into one of the very rare non-UK micro-cap strategies on the market is seemingly not possible.

At a time of severe threat from passive investments, can the active fund management industry afford to turn away willing customers?