Opportunities in Small-Cap Asset Management Firms

One of the areas that has been beaten up rather significantly and in my opinion far too deeply has been microcap and small cap asset management firms. Below are two companies which I see as being potentially huge winners over the long-term. What each has in common is a strong ability to achieve excess returns in markets, a strong and conservative management team, and a healthy balance sheet.

Highbury Financial
- The company owns 2/3 of Aston Funds, which operates 30 mutual funds and ETFs. Highbury (HBRF.OB) acquired Aston from ABN Amro (ABN) in 2006 and since launch has added 11 new strategies to their list of sub-advised mutual funds.
- Trading at just 6x trailing cash EPS with strong cash generation each quarter
- Very strong balance sheet: The company has $8.6 million in cash as of the last quarter-end with no debt. The cash level is equal to $0.95 per share (assu