Smaller company secrets

Smaller companies are often favoured by private investors looking for the next big thing. Companies pushing the boundaries of technology, mining scarce resources in far-off places, or forgotten by the City, promise riches far beyond plodding blue chip titans. The problem is for every success story, there are many disappointments. Investors do not have much to go on. While man-years are devoted to the analysis and reporting of events at Vodafone and BP, smaller companies rarely make the headlines. So how do private investors and fund managers find the hidden gems, and where are they looking now?