On a winter morning off the Champs-Élysées, I stepped inside one of Europe’s best-performing small cap stock-picking firms. To find out what separates it from the pack.
A few weeks before, past 1:00 AM on a Tuesday, I was caught in that hazy middle ground between a long workday and much-needed sleep. With a podcast replaying in the background, I heard Romain Burnand, founder of Moneta Asset Management, extend an unusual invitation: a chance to step inside their Morning Meeting and see the gears turn for myself. In a burst of late-night curiosity, I applied right then and there. To my surprise, a few weeks later, I found myself at 36 rue Marbeuf, coffee in hand, waiting to see if the reality lived up to the reputation.
There were a dozen or so analysts and fund managers, the founder, and Kawalec – the other long-term partner and lead manager.
A Morning Meeting Without Theatrics
Burnand addressed them from his own station. He is calling on each analyst by name as they stood at their desks. One by one, they share what their own research has uncovered, the latest news flow, and insights from broker reports. No meeting room. No slides. Substance over form.
In a separate room, a portfolio manager then walked us through another company. A Spanish renewables developer that made the strategic decision to leave the overcrowded, low‑price Iberian power market. The company decided instead to build solar farms in Chile’s Atacama desert to power the mining industry.
The simple elegance of the thesis was striking. Use some of the world’s most intense sunlight to charge vast Chinese batteries by day. Sell scarce and premium-priced electricity to miners at night. Others saw the end of a subsidy boom in Spain. Moneta saw a business willing to migrate to a tougher geography in exchange for better economics. A successful investment.
The same analyst described a rising French discount retailer where the share price looked respectable but something was fishy. The team had scraped thousands of Google reviews and discovered a sour turn in loyal customers’ tone. Complaints about messy aisles, empty shelves, muddled product ranges. Non‑financial data, largely ignored by the market, betrayed a franchise potentially drifting off course.
This is the Moneta way. A patient search to arbitrage the markets’ irrational infatuations, or excessive disenchantements with specific stocks.
Then, a little later, Romain Burnand, the man whose performance has multiplied capital roughly twenty‑twofold in twenty‑two years walked in.
Fund Performances Defying Gravity
In a world intoxicated by American tech, it is easy to forget what a 22x return actually means. Turn €1 into €22 over 22 years and you are compounding at roughly a year.
Outside finance, that kind of steady compounding is almost absurd. If you could increase the weight you can lift in the gym by 15% every year, starting from 50 kilos, after two decades you’d be casually hoisting the better part of a small car. I struggle to wrap my head around just how consistently strong their performance has been.
Most European equity funds have not been hoisting small cars. Over the past two decades, European indices have delivered middling single‑digit annual returns. The overwhelming majority of active managers have trailed even that. By any reasonable standard, sustaining a mid‑teens annualised return in smid French equities, across crashes, crises and 20 years of Europe “missing out” per competitiveness reports, puts Burnand’s record close to the territory normally reserved for names like Peter Lynch or John Templeton.
Yet, from my experience, outside France’s investing circles, his name hardly registers. In a sense, Romain Burnand resembles the kind of stock he likes to buy: under‑followed, quietly compounding in a corner of the market most global investors barely glance at.
No Magic Formula
I asked him during the workshop if Moneta had any proprietary indicator the market was missing. He smiled, and did not pretend to possess a secret formula.
“Unfortunately, no,” he said in substance. “And if we did, we certainly wouldn’t talk about it.”
He did heed caution on corporate debt.
Markets, he argued, swing between two extremes. In good times, leverage is celebrated: cheap borrowing is labelled “capital optimisation”. Balance sheets bloated with debt are shrugged off as efficient.
Then a crisis arrives, rates rise or liquidity vanishes – and suddenly, the very same debt is a mortal sin. Companies under stress are forced to dump assets or dilute shareholders through emergency capital raises at miserable prices.
There is no universal safe leverage ratio. It depends on the nature of the cash flows. A real estate group dependent on refinancing has a very different margin of safety from a utility with recurring revenues. During the Covid shock, well‑run companies refinanced long and cheap when rates hit zero. Others, less disciplined, will spend years digging themselves out.
Moneta’s edge here is prosaic but by evidence successful: detailed spreadsheets. Headline debt/EBITDA, debt maturities, covenants, and the character of cash flows. The market is emotive about debt. First euphoric, then horrified. A firm that simply tracks the arithmetic can arbitrage between names unfairly “massacred”, as Burnand puts it, and those treated as indestructible when they are not.
No magic indicator, then. Just discipline, and work. Serves me right for asking for a shortcut! That’s clearly not how they roll.
A Reluctant Activist
Burnand insists Moneta is not an activist shop, and the firm does not go hunting for broken companies to fix. But he is not passive either: “We are not passivists!” he jokes.
When corporate actions threaten to bulldoze minority shareholders, he has shown a quiet willingness to fight.
He told us the story of a listed French company born from industrial know‑how in gas purification. Its business: turning methane from landfill into renewable gas under long‑term fixed‑price contracts. It was industrially sound but financially ill‑managed. The company funded its growth via repeated capital increases. The share price duly collapsed; banks demanded a deep discount on the next rights issue, and retail investors were furious.
Management’s solution was to sell the company to a private‑equity fund, and blame “the market” for not understanding them. The founders kept a large stake. Small shareholders were shown the door.
Moneta did something unusual. Instead of walking away or grumbling in private, they proposed a structure that allowed them to stay on board. They offered a sweetener: a premium on the selling price to small holders so they could buy a larger slice of the available shares. It improved the fairness of the deal and anchored themselves as a long‑term partner to a business they liked. Precisely at the moment when others were giving up.
The lesson for Burnand was not that activism pays, but that information is never symmetrical. Minority shareholders must occasionally be willing to challenge the cosy alignment of corporates, banks and advisors.
This is hardly the caricature of the French fund manager trading CAC 40 names on morning research calls. It is painstaking, niche, sometimes unglamorous work around small and mid‑caps that most global funds do not have the time, or size flexibility, to bother with.
Europe’s Unfashionable Garden
How is Moneta’s heavy lifting not more famous?
One answer is geography. Continental European equities, including French small‑caps, have been long‑term underweights in global portfolios. The flows, the narratives, the benchmarks… they all point to America. When Europe is represented, it’s typically through a few megacaps, like LVMH, ASML or Novo Nordisk. As France grapples with fiscal deterioration, the market remains wary of protracted political psychodrama where the noise of budget deficits and dissolutions often obscures the underlying resilience of the companies themselves.
Burnand’s remains unperturbed. The past year’s turmoil, he notes, created opportunities in resolutely French names: banks, infrastructure companies, service groups with domestic anchors. There valuations were marked down aggressively. Many of those businesses, in reality, derive a majority of their cash flows from outside France.
European indices themselves are more global than their labels suggest. A luxury conglomerate with only a quarter of revenue in Europe is less a French stock than a global consumer franchise. Airbus sells planes to the world, not to the CAC 40. To apply a simple sovereign‑risk filter to such names is, in his view, probably more dogma than analysis.
There is an irony here. In an era when Europe’s equity markets are dismissed as backwaters condemned to underperformance, a little Parisian boutique has quietly produced a track record that rivals US legendary money managers.
A Room Full of Retail investors
What makes Burnand unusual is not just his process, but his audience. He takes the time to welcome packs of retail investors like myself into his morning routine, and then stands patiently through questions that range well beyond his mandate.
In an age when billionaire CIOs hide behind investor‑relations teams and scripted webcasts, the founder of one of the most successful stock-picking strategy in Europe is fielding impromptu questions about Bitcoin from small savers clutching notebooks. He does it without condescension or visible impatience. This accessibility is not merely a courtesy; it is the hallmark of a manager who has earned the trust of institutional giants and individual investors alike, commanding the credibility to raise €100M in seed capital for the launch of their new fund with and without banking middle men. It is a rare blend of technical authority and genuine human engagement.
It was in this spirit that I committed what, in retrospect, felt like a minor heresy. Here was a man who has outperformed 99% of his peers, through the 2008 GFC and the Euro crisis, backed by a team of analysts who spend ten hours a day modelling a universe of only a few hundred stocks. And I asked him, in front of everyone, how a solo retail investor, with a full‑time job and a handful of evenings to spare, might possibly hope to go-it-alone, or copy any of this.
But, he did not laugh me out of the room.
He said: “I have been a solo investor for some time, after all.”
Burnand’s answer was at once sobering and encouraging. No, a part‑time individual cannot replicate today’s Moneta set‑up: a compact team focused on 300 names, deep management access, industrial‑strength data, years of accumulated knowledge.
But there is a small, real edge available to individuals: liquidity and proximity.
A retail investor, he suggested, should not own thirty or forty stocks. That is institutional behaviour without institutional resources. Instead, you can afford to specialise shamelessly. Start where you work, or with sectors you understand viscerally: a supplier you see up close, a technology you are genuinely expert in, an industry you follow out of passion rather than FOMO. Read the annual reports of the smaller companies in that niche. You do not need to meet management; in some ways, avoiding the charisma of executives can help you keep a cooler head.
The danger is not in being concentrated; it is in being in love. You must be willing to sell when the story changes, not just when the share price hurts. And you must resist hyperactive and jittery trading. A portfolio, he argued, should be treated more like an apartment you intend to live in for a while: you do not wake up every morning wondering whether to flip it.
The Proximity Advantage
Paradoxically, the small investor has two advantages professionals envy. The first is size: your orders will never move the market, so you can enter or exit tiny, illiquid names that are simply off‑limits to big funds (Moneta even had to limit subcriptions to its micro-cap fund, probably for liquidity reasons). I suspect the second is time horizon: nobody is calling you every quarter to justify why a stock is underperforming an index. You can afford to wait for good theses to play out… or to admit, without career risk, that they were wrong.
There is no recipe, no magic ratio. If Burnand has a single non‑negotiable indicator, it is still the elementary stuff: debt, cash flows, the instinctive suspicion of companies that resort to large acquisitions as a cure for their own growth problems. “The company has to be healthy first,” he likes to say in effect, “and then do the small bolt‑on deals that extend its reach without blowing up the balance sheet.”
Data, AI and the art of asking questions
For a shop that trades on human judgement, Moneta is far from technophobic. They employ statisticians who sift through non‑financial signals: customs data, patterns in online reviews, job postings. They use tools like AlphaSense to scan the deluge of research and news, and even ChatGPT to condense the economic history of a country or untangle obscure industries.
But here too, Burnand’s attitude is against “l’air du temps”. The point of AI is not that it will magically spit out a trade; it is that it can amplify the value of good questions. The language model can blend old and new information into a passable narrative, but it cannot, so far, see the cases coming, or calculate when leverage has crossed a line from tool to trap, unless a human has framed the problem first.
In the end, the hard part has not changed: deciding when the market has gone too far in its love or its disdain for a company, and being willing to take the other side before the narrative turns.
An Undervalued Legend
France and Europe markets are not fashionable. Their stock markets attract less capital, their economies have grown more slowly, and their political dramas make global headlines more often than their corporate champions do. In that unfashionable garden, Romain Burnand has quietly cultivated one of the most remarkable long‑term records in European asset management, delivering for his investors in a way that invites comparison with the great Anglo‑Saxon legends, even if he would probably be embarrassed by the analogy.
Why is he and his associate Andrzej Kawalec not more famous across borders? Perhaps because fame, like capital, follows narratives, and Europe’s narrative has been one of relative decline. Perhaps because Moneta has no captive retail distribution machine, no glossy advertising campaigns, no desire to be a household name. To my knowledge, they haven’t written a bestseller book on investing (but I would read it). I suspect it suits them well to remain small, independent and under-the-radar. That gives them more ability than becoming a set of beacon or market trackers.
Or perhaps, more simply, because like many of the mispriced companies he favours, Burnand’s reputation is still in that curious market phase where the numbers are undeniable but the story has yet to catch up. Like any under‑followed asset, the legend may simply need more time to compound.
Solace for the Retail investor
To me, this workshop was oddly reassuring. It suggests that in a world obsessed with star tech managers and meme stocks, there is still room for quiet compounding born of discipline, curiosity and an almost old‑fashioned respect for balance sheets. Even if we will never clone Moneta’s research engine, we can still borrow some of its habits. The insistence on understanding a few things well. The scepticism toward leverage. The willingness to look where others are not looking.
I left 36 rue Marbeuf with something different than a secret formula: a blueprint for my V1 Portfolio. Burnand proves that even today, a deep command of the annual report remains a rampart against capital loss. The rest is just market noise. The real edge is found in the work that others are too lazy to do.
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