Dahlgren Capital announces the launch of DCap Active Equity, a microcap fund dedicated to buying, developing, and delisting small listed companies where long-term value can be better created outside the stock market.

Many microcap companies face challenges such as low liquidity, short-term market pressure, and unrealistic valuations – often a legacy of the 2020–2021 investment climate when capital was abundant and valuations reached unsustainable levels. Today’s market environment demands profitability and returns, creating an opportunity that institutional investors have largely overlooked.

“For many companies, the stock market is not a good environment. Companies have been listed at too high valuations, investors are not satisfied with the development and there is low liquidity in their shares,” explains Gustaf Karling, Managing Partner at Dahlgren Capital for DCap Active Equity.

DCap Active Equity targets companies with a market capitalisation of SEK 100 million or less, a turnover of around SEK 200 million, and positive cash flow. The fund applies what Dahlgren Capital calls friendly activism – working closely with management and other owners to strengthen operations, unlock potential, and either delist the company to create value in a less demanding environment or position it for a strategic sale to larger players.

“There is a space where institutional investors are not. These companies often want to get off the stock market, and there is a strong desire to make an exit,” adds Gustaf Karling.

In its first year, DCap Active Equity has invested approximately SEK 55 million across five companies in diverse sectors – from AI to irrigation systems – achieving returns of around 90 percent in one year. These early results demonstrate the fund’s ability to identify undervalued opportunities with significant value-creation potential.

The fund will operate with a 10–30 percent ownership model and a two-year liquidity horizon. The initial fund size is SEK 150–170 million, including Dahlgren Capital’s own capital, with room for three additional investments. Unlike traditional fund models that prioritise management fees, DCap Active Equity is designed to align interests – charging fees only to cover costs, while profits are primarily generated through returns on invested capital.

“Many fund companies make their money from management fees. We, of course, also charge a fee to cover costs, but primarily it is the return on our own capital that we want to make a profit on,” says Gustaf Karling.

DCap Active Equity maintains a market-agnostic approach while maintaining disciplined sector exclusions. "We stay away from MedTech, which we feel we don't understand, and BioTech and gaming, which we think are too binary," notes Gustaf Karling.

DCap Active Equity fills a unique niche in the Swedish market, attracting strong investor interest and reinforcing Dahlgren Capital’s active ownership philosophy.

“We have a large network and there are many who want to support us. We also feel that we are still quite alone in Sweden with this approach,” says Gustaf Karling.

The launch of DCap Active Equity underscores Dahlgren Capital’s commitment to identifying overlooked opportunities and driving long-term value creation through active, hands-on ownership – a cornerstone of the firm’s investment strategy.