WAYNE, PA — Conestoga Capital Advisors recently reopened its Small Cap Fund to new investors on July 28 after an eight-year closure, citing increased strategy capacity and valuations the firm views as unusually favorable for high-quality small-cap growth companies.
The Conestoga Small Cap Fund, offered through Institutional Class shares (CCALX) and Investor Class shares (CCASX), had been closed to most new investors since 2018 as the Wayne-based investment manager sought to limit asset growth and preserve trading flexibility.
Conestoga reopened the fund following a review of assets and market conditions. The firm determined the strategy could accept additional capital without altering the investment process used for more than two decades.
“We view fund closures and reopenings as investment decisions—not marketing decisions,” Bob Mitchell, co-founder and co-portfolio manager, stated. “Today, we believe the Fund has ample capacity, and the valuation backdrop for high-quality small-cap companies is among the most favorable we’ve seen in years.”
The reopening allows Conestoga to pursue new inflows at a time when small-cap growth stocks have lagged a market dominated by a relatively narrow group of companies.
Mitchell argued that recent market leadership has favored lower-quality, higher-volatility businesses while stronger companies have continued producing operating results despite falling valuations. Conestoga views that divergence as a potential entry point for long-term investors.
The fund focuses on companies with strong returns on capital, sustained earnings growth, durable balance sheets and significant management ownership. Its broader strategy emphasizes competitive advantages, long-term growth prospects and downside protection.
Conestoga indicated that its core investment philosophy remains unchanged, though it has refined portfolio construction to diversify sources of return and improve performance across different market conditions.
“What has evolved is the valuation opportunity,” Managing Partner and Co-Portfolio Manager Derek Johnston stated. “We believe today’s market environment is well suited for patient, long-term investors focused on business fundamentals rather than short-term market leadership.”
The firm plans to continue monitoring assets and market conditions and could restrict new investment again if asset growth begins to reduce portfolio flexibility or execution.
The fund is available directly through Conestoga and through selected financial intermediaries and investment platforms, though access may vary by provider.
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