The Family Enterprise fund rose 3.9% in February, which was slightly ahead of the benchmarks. Since the beginning of the year the fund is up 6%, outpacing the Euromoney European Smaller Companies index (+4.2%) and the Stoxx600 Europe (+2.4%). We continue to benefit from the smaller companies tailwind, but this last month we faced the headwind as once again the market favoured “Growth” style situations over “Value”. After a return to grace of Value stocks in the last 4 months of last year and the beginning of this year, Growth stocks (particularly consumer staples and healthcare) had a strong rally in February whilst Value stocks struggled to remain flat. If European equity markets have made reasonable gains, they are still very much lagging the continued Trump bounce in the US (+5.7% YTD) and the euphoria in Asia (+10.6%). Within Europe, the tensions have been mounting ahead of crucial elections with stress visible in bond yield spreads, which have in turn led to more buoyant equity markets in Northern Europe whereas Southern European equity markets have edged lower. We have made quite a number of company visits over the last two months and the messages we have been getting from company managements have been quite encouraging. The positive trends in business that were felt in the last quarter of last year have continued into the first two months of this year. So far the political worries that have been stealing the headlines do not seem to have dented corporate confidence. The fund’s strongest performance came from our investment in Swedish natural cosmetics company Oriflame. We are generally long term investors and our portfolios are known for low rotation, but having taken profits on a substantial proportion of our shares in the autumn last year we added once again when the shares fell a very substantial 30% in November on a slight ‘miss’ with their quarterly figures. We are strong believers in the long term efficiency of the equity markets, but this is a clear illustration that in the short term one can see excessive reaction to good or bad news. With the publication of full year figures in February showing a doubling in net profits and the management giving an upbeat statement, the share snapped back 39%, thus giving us a healthy profit on our reinforced investment. Our second best performance with a 22% rise came from professional gardening equipment maker Emak, which is owned by a group of families from Emilia-Romagna in Italy. We have been building up a holding in the company as it is seemingly on a very undemanding valuation with a single digit PE ratio. After many meetings with the management, we feel that there seems to be at last an engagement to improve margins and reduce the level of debt on the balance sheet. Despite weaker equity markets, our third best performer also came from Southern Europe in the form of Fluidra, which is a Spanish manufacturer and distributor of all the equipment required to build, upgrade and maintain swimming pools. From its origins as leader in Spain and France from its base in Catalonia, the company has progressively become world leader with dominant market shares in the core markets. The share rose 21% as the company confirmed it is exiting its recovery phase with an 85% rise in net profits in 2016. Construction equipment maker Wacker Neuson is another company that we felt had been unfairly sanctioned for short term considerations. Our expectation is that the upcoming publication of last year’s figures will show a stronger end to the year and give an upbeat outlook for 2017. In the meantime, the share rose 18% as the company unveiled a hidden asset in the form of property holdings in Munich which it is planning to sell for a substantial capital gain. Furthermore, with substantial operations in the USA, including manufacturing capacity, the company should be a beneficiary of the substantial investments in infrastructure earmarked by the Trump administration. The retail chain focusing on senior citizens, Damartex, rose 11% on follow-on buying after the publication of an improvement in sales at the end of the year. Our shares in the Mytilineos family’s holding company Mytilineos continued 10% higher as the 15% rise in the Aluminium price will further enhance the profitability of its subsidiary Aluminium of Greece, which continues to be the lowest cost producer in Europe. The holding company has launched a contested bid to buy out the minority shareholders of its Metka construction subsidiary. As it is paying in Mytilineos shares, this strong performance increases the likelihood of the accretive deal Investment Style / Objective: Value Equity Fund – The Family Enterprise Fund invests in small and medium sized European companies operating established businesses, that are listed but still partly owned by family shareholders. Through their representation on the companies’ boards, these shareholders provide continual oversight and make sure the executives manage the company in the interest of shareholders. The families’ interests are aligned with ours as they tend to favour long term risk-averse strategies and the regular distribution of dividends. Within this universe, the fund selects undervalued companies with attractive prospects using a rigorous investment process and in-depth fundamental research and analysis. Management Team : Marc Saint John Webb, Philip Best
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Management Team : Marc Saint John Webb, Philip Best€¦ · Mytilineos family’s holding company Mytilineos continued 10% higher as the 15% rise in the Aluminium price will further
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Transcript
The Family Enterprise fund rose 3.9% in February, which was
slightly ahead of the benchmarks. Since the beginning of the
year the fund is up 6%, outpacing the Euromoney European
Smaller Companies index (+4.2%) and the Stoxx600 Europe
(+2.4%). We continue to benefit from the smaller companies
tailwind, but this last month we faced the headwind as once
again the market favoured “Growth” style situations over
“Value”. After a return to grace of Value stocks in the last 4
months of last year and the beginning of this year, Growth
stocks (particularly consumer staples and healthcare) had a
strong rally in February whilst Value stocks struggled to
remain flat. If European equity markets have made reasonable
gains, they are still very much lagging the continued Trump
bounce in the US (+5.7% YTD) and the euphoria in Asia
(+10.6%). Within Europe, the tensions have been mounting
ahead of crucial elections with stress visible in bond yield
spreads, which have in turn led to more buoyant equity
markets in Northern Europe whereas Southern European
equity markets have edged lower.
We have made quite a number of company visits over the last
two months and the messages we have been getting from
company managements have been quite encouraging. The
positive trends in business that were felt in the last quarter of
last year have continued into the first two months of this year.
So far the political worries that have been stealing the
headlines do not seem to have dented corporate confidence.
The fund’s strongest performance came from our investment in
Swedish natural cosmetics company Oriflame. We are
generally long term investors and our portfolios are known for
low rotation, but having taken profits on a substantial
proportion of our shares in the autumn last year we added once
again when the shares fell a very substantial 30% in November
on a slight ‘miss’ with their quarterly figures. We are strong
believers in the long term efficiency of the equity markets, but
this is a clear illustration that in the short term one can see
excessive reaction to good or bad news. With the publication
of full year figures in February showing a doubling in net
profits and the management giving an upbeat statement, the
share snapped back 39%, thus giving us a healthy profit on our
reinforced investment.
Our second best performance with a 22% rise came from
professional gardening equipment maker Emak, which is
owned by a group of families from Emilia-Romagna in Italy.
We have been building up a holding in the company as it is
seemingly on a very undemanding valuation with a single digit
PE ratio. After many meetings with the management, we feel
that there seems to be at last an engagement to improve
margins and reduce the level of debt on the balance sheet.
Despite weaker equity markets, our third best performer also
came from Southern Europe in the form of Fluidra, which is a
Spanish manufacturer and distributor of all the equipment
required to build, upgrade and maintain swimming pools.
From its origins as leader in Spain and France from its base in
Catalonia, the company has progressively become world leader
with dominant market shares in the core markets. The share
rose 21% as the company confirmed it is exiting its recovery
phase with an 85% rise in net profits in 2016.
Construction equipment maker Wacker Neuson is another
company that we felt had been unfairly sanctioned for short
term considerations. Our expectation is that the upcoming
publication of last year’s figures will show a stronger end to
the year and give an upbeat outlook for 2017. In the meantime,
the share rose 18% as the company unveiled a hidden asset in
the form of property holdings in Munich which it is planning
to sell for a substantial capital gain. Furthermore, with
substantial operations in the USA, including manufacturing
capacity, the company should be a beneficiary of the
substantial investments in infrastructure earmarked by the
Trump administration.
The retail chain focusing on senior citizens, Damartex, rose
11% on follow-on buying after the publication of an
improvement in sales at the end of the year. Our shares in the
Mytilineos family’s holding company Mytilineos continued
10% higher as the 15% rise in the Aluminium price will
further enhance the profitability of its subsidiary Aluminium of
Greece, which continues to be the lowest cost producer in
Europe. The holding company has launched a contested bid to
buy out the minority shareholders of its Metka construction
subsidiary. As it is paying in Mytilineos shares, this strong
performance increases the likelihood of the accretive deal
Investment Style / Objective: Value Equity Fund – The Family Enterprise Fund invests in small and medium sized European companies operating
established businesses, that are listed but still partly owned by family shareholders. Through their representation on the companies’ boards, these
shareholders provide continual oversight and make sure the executives manage the company in the interest of shareholders. The families’ interests are
aligned with ours as they tend to favour long term risk-averse strategies and the regular distribution of dividends. Within this universe, the fund selects
undervalued companies with attractive prospects using a rigorous investment process and in-depth fundamental research and analysis.
Management Team : Marc Saint John Webb, Philip Best
90.00
100.00
110.00
120.00
130.00
mai
16
juin
16
juil
16
août
16
sept
16
oct
16
no
v 1
6
déc
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janv 1
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fév
r 17
being finally successful.
On the downside, our shares in Groupe Gorgé fell 10% on the
publication of disappointing sales figures for 2016 showing a
slower trend in Q4. The slower sales came from the
Aeronautics and Robotics divisions, whilst the 3D Printing
business grew by 42%. Catering International, the specialist
caterer for extreme locations, fell 8% on profit taking after a
strong rise over the last few months. We have been building up
our holding here as, with a substantial proportion of business
looking after staff in the mining and oil industries, the
company is likely to start seeing a pick-up in business with the
recovery in the price of oil and other resources.
Sources : QUAERO CAPITAL SA, Euromoney PLC, data.cnbc.com
This document does not constitute an offer or solicitation to purchase the shares in the Fund described here-in. Past performance is no indication of
current or future performance, and the performance data do not take account of commissions and costs incurred on the issue and redemption of
units. Any decision to invest should be based on a full reading of the fund prospectus and the most recent financial statements. The information and
figures here-in are valid on the date here-of. There is no obligation to update the figures here-in.
The Swiss prospectus, KIID, articles of association, annual and semi-annual reports in French and other information can be obtained for free from
the Swiss representative of the fund: Carnegie Fund Services S.A., 11, rue du Général-Dufour, CH-1204 Genève, Suisse, web : www.carnegie-fund-
services.ch. The Swiss paying agent is the Banque Cantonale de Genève, 17, quai de l’Ile, CH-1204 Genève, Suisse. The latest prices are available on
www.fundinfo.com. For further information please contact:
QUAERO CAPITAL (Luxembourg) SA, e-mail: [email protected], Tel. + 352 26 26 25 05
QUAERO CAPITAL SA, Geneva, e-mail: [email protected], Tel. +41 22 799 90 90, Fax. +41 22 799 90 99
Subscription and redemption fees as mentioned in the prospectus can be waived upon identification of the investor either via the relevant form or direct
notice providing the INVESTING INSTITUTION’S NAME, the BANK ORIGINATING THE SUBSCRIPTION, the SUBSCRIPTION / REDEMPTION
Investment Style / Objective: Value Equity Fund – The Family Enterprise Fund invests in small and medium sized European companies operating
established businesses, that are listed but still partly owned by family shareholders. Through their representation on the companies’ boards, these
shareholders provide continual oversight and make sure the executives manage the company in the interest of shareholders. The families’ interests are
aligned with ours as they tend to favour long term risk-averse strategies and the regular distribution of dividends. Within this universe, the fund selects
undervalued companies with attractive prospects using a rigorous investment process and in-depth fundamental research and analysis.
Management Team : Marc Saint John Webb, Philip Best
Source : QUAERO CAPITAL SA
Source : QUAERO CAPITAL SA
Source : QUAERO CAPITAL SA Source : QUAERO CAPITAL SA
Family owned & Family Managed 61%
Family owned with External Management
39%
Entrepreneurial / 1st Generation 16%
2nd Generation 50%
3rd Generation 11%
Transgenerational 23%
Legal Form Luxembourg Umbrella SICAV - Part I (UCITS) Subscription Notice 2 business days before valuation date (6 pm
Luxembourg time max)
Registration for Public Distribution Luxembourg, Switzerland, France, United Kingdom, Germany,
Spain, Singapore
Redemption Notice 5 business days before valuation date (4 pm
Luxembourg time max)
PEA Yes Minimum investment EUR 10’000
Investment Manager QUAERO CAPITAL SA Annual management fee 1.5%
Management Team Marc Saint John Webb, Philip Best Performance fee 12.5% over absolute 5% per annum subject to
High Water Mark
Administrator and custodian Pictet & Cie (Europe) SA Currency Class EUR
Auditor PriceWaterhouseCoopers, Luxembourg ISIN Code Class D EUR (Closed to new investments) LU0661743103 Legal Advisors Allen & Overy, Luxembourg ISIN Code Class A EUR LU0705182367 Geographical Region Europe ISIN Code Class A CHF LU1110203533
Inception date 31 December 2007 ISIN Code Class A USD LU1110203459
Reference Index Euromoney Smaller European Companies Index Institutional Classes Available on request
Subscription and Redemption Weekly
€
Source : QUAERO CAPITAL SA Source : QUAERO CAPITAL SA
Subscription and redemption fees as mentioned in the prospectus can be waived upon identification of the investor either via the relevant form or direct
notice providing the INVESTING INSTITUTION’S NAME, the BANK ORIGINATING THE SUBSCRIPTION, the SUBSCRIPTION / REDEMPTION