In 2025, much of the excitement (and much of the return) in global stock markets was concentrated in a relatively small group of large companies. The Forager International Shares Fund finished the 2025 calendar year ahead of the MSCI All Country World Index. Yet most of the Fund’s returns came from companies few investors would recognise and none were considered “AI leaders”. If not from the obvious winners, where did those returns come from? There are three key ways Forager’s International Fund has managed to overcome this headwind within the small-cap space.
Small companies can still ride the trend
Global investment in AI infrastructure accelerated sharply in 2025, with the “Big Four” spenders (Google, Microsoft, Amazon and Meta) increasing their capex spend 62% year-on-year. That spending flowed beyond chipmakers and hyperscalers into data centres, power generation and industrial services. Several Fund investments benefited directly from that surge in capital expenditure, even though they were not labelled as “AI stocks”.
Heating, ventilation and cooling contractor Comfort Systems (NYSE: FIX) saw rising demand as data centre construction increased, with its share price up 120% in 2025. Solar equipment manufacturer Nextpower (NASDAQ: NXT) benefited from the same build-out, supplying infrastructure to energy-intensive computing facilities, and its share price rose 138% over the calendar year.
That distinction mattered. It showed investors did not need to own the most crowded names to benefit from structural change. In a dispersed market, indirect exposure bought at the right price could be just as powerful and often came with far less competition.
Nutex Health and the value of idiosyncrasy
Nutex Health (NASDAQ: NUTX) reinforced that small idiosyncratic winners can go the opposite way to market trends.
The healthcare sector as a whole struggled for much of the year, with the iShares U.S. Healthcare ETF returning just 12% for the 2025 calendar year. Nutex, however, did not. The stock returned 351% over the year, driven by company-specific execution rather than broader sector momentum. This was not a linear increase; there was plenty of volatility along the way. However, while volatility was elevated, active portfolio management allowed the Fund to benefit from these price swings rather than be hindered by them, resulting in a fivefold increase in the share price since the Fund’s initial purchase.
Zegona: a complex situation that paid off
At the small end of the market, value realisation events can provide big wins in difficult markets. Zegona Communications (LON:ZEG) is one such example.
The Fund invested after Zegona acquired Vodafone Spain, a deal financed with a complicated structure. For many investors, the complexity alone was enough to stay away. For Forager, the complexity was the opportunity.
If Zegona's experienced management team could sell assets and simplify the structure, Zegona's equity would become much more valuable. Over the past six months, Zegona sold its fibre assets, generating €1.8 billion of upfront proceeds. These proceeds fully funded the redemption and cancellation of Vodafone’s preference shares, reducing the ordinary share count by 69%, alongside a shareholder dividend and debt reduction.
As the risks fell away, the market reassessed the share value, sending the price up 130% from initial purchase - a special situation that paid off for shareholders while many large telecommunications companies were struggling.
The bigger picture on small-cap opportunities
For Nutex and Zegona, the common thread was not the sector or the theme. It was the idiosyncratic nature of the situation, where what mattered most was what the company did, not what the market expected.
This kind of investing is often volatile. Evidently so, given the Nutex share price has fallen 35% in 2026. But these examples show winners can be found at the small cap end of the market if you are prepared to do the work and to look where others are not.
The Forager International Fund has generated value for clients beyond the mega-caps that have driven market performance over the past five years. Should those leaders lose momentum, the advantage of the Fund’s differentiated, idiosyncratic approach is likely to become even more evident.
If you haven't already joined our investing community and would like to find out more about idiosyncratic global stock ideas, please fill in the form below: