Every investor hopes to identify the next Google, ASOS or Apple before the rest of the pack, but not every investor is happy to stomach the high risk nature of investing in a company during its early stages or at times of market or sector volatility.

However, for the braver among us, there are plenty of UK-listed companies offering high upside potential.

Here, Matthew Jennings, investment director at Fidelity reveals three of his more risky stock picks for the year.

Jennings’ first tip is AIM-listed, high-tech chemicals company, Nanoco.

Nanoco is a developer and manufacturer of ‘quantum dots’.

Quantum dots are semiconductor nanoparticles that glow a particular colour after being illuminated by light.

These nanoparticles can be used in displays for applications ranging from mobile phones to large screen televisions in a way that would consume less power than current displays, and depending on the size of the quantum dot in each pixel of a display screen, a fuller spectrum of colour can be seen.

“Roughly 12 months ago Nanoco signed a transformative deal with Dow Chemical, which in our view, significantly increases the chances of their ‘quantum dot’ technology being used in next generation flatscreen TVs,” Jennings says.

He points out that most of the company’s value is in its intellectual property – it is the only company worldwide to have discovered a method of quantum dot production which does not require the use of the heavy metal Cadmium, which is banned from consumer products if alternatives are available.

“We will be looking for meaningful steps towards monetisation of this world-leading technology in 2014. Should the company announce an agreement with a large consumer electronics company, as we expect, then the upside is significant. If no deal emerges then investors may begin to lose patience, making it a riskier than average investment,” he says.

Jennings also likes retail park developer LXB Retail, which invests in out-of-town and edge-of-town retail assets.

He says the company has the ability to capitalise on the lack of investment occurring in this area by providing retailers with an attractive alternative to many of the obsolete locations in the UK.

“The company currently has a number of sites which we expect to be sold in the next three years. In an improving consumer environment, despite the well-publicised difficulties many retailers face, we believe the market may be underestimating the amount of value that could accrue to shareholders as a result of this deal,” he says.

Oil and gas exploration company Rockhopper is another of Jennings’ picks for the brave.

Rockhopper is the only company to have found oil in the highly publicised South Atlantic basin near the Falkland Islands.

The company announced a ‘farm out’ deal with Premier Oil in 2012 which saw many of the development costs of the asset transferred to the larger company, but Rockhopper retains the upside from production and further exploration.

At the time the market was disappointed with this deal as it was hoping that a larger company would buy Rockhopper outright.

Jennings adds: “However, in the long term, the current arrangement could end up being significantly more profitable for investors as it leaves them with a very valuable asset with further advantage from exploration.”

Nevertheless, investors should note that extracting oil from the Falkland Islands, still disputed by Argentina, is a risky business, and also should be prepared to wait the three years or so before production starts.

Fund picks for the brave investor…

For investors who are unwilling to pick individual stocks, Adrian Lowcock from Hargeaves Lansdown highlights two funds that could prove rewarding.

He says: “If you are looking for funds I would suggest the Smith & Williamson Global Gold & Resources fund. It invests in gold mining companies, but smaller companies.

“This is a risky asset class, particularly when the underlying gold price has been falling. This has forced some companies into liquidation whilst others have been writing off loses. Currently the share price of gold miners looks cheap but earnings are still fragile and sentiment is negative. One very much for the brave.

“I would also suggest looking at Marlborough UK Micro Cap Growth fund, managed by Giles Hargreave. The fund manager has exceptional stock picking skills and is able to add value through this. Given his expertise and the diversified nature of the fund it is not so much one for the brave but more a higher risk fund because around 70% of it is invested in AIM shares.”