Whither the wind blows
Kempen Capital Management has long used fundamental analysis to select securities. Big data has played an increasingly important role in how we decide which investments to make over the past few years, but the challenge is to process these data in such a way that they yield information that contributes to improved decision-making and ultimately higher investment returns. Kempen applies this approach in how it selects a range of investments, including wind and solar energy companies.
Managing tail risks
When Kempen developed a model that focused on extreme risks in 2019, few people would have predicted that such a tail risk would become reality just a short time later with the outbreak of the Covid-19 pandemic. We asked Fiduciary Manager Frank van der Ploeg what lessons can be learned from the coronavirus crisis, and how our model can help to manage risk in 2021.
By 2021 the climate for investments will already have changed
The extreme weather events we’ve seen in 2020 have served as a stark reminder of why investors like Kempen must take into account climate-related risks and invest in a greener future.
Infrastructure equities performed extremely well in 2019, with our infrastructure fund up more than 30% over the year – not bad for an asset class providing stable, predictable cash flows. It continued in a similar vein at the start of 2020, but then coronavirus hit and things became more volatile. So after a turbulent year, what factors should infrastructure investors be looking out for in 2021?
Attractive return potential and risk diversification
Investors who focus purely on the markets are leaving an enormous amount of potential untapped. Under 2% of companies are listed on stock markets. The remaining 98% provide a huge range of opportunities to help investors achieve the returns that they need. That’s why Kempen is highly active in private markets, which include not just private equity, but also farmland and infrastructure.
The importance of stakeholder capitalism
The ongoing pandemic has put our concept of ‘the Real Active’ to the test. It has seen Kempen ask firms to cancel dividends and collaborate on important issues such as access to medicine and safeguarding labour standards in the clothing industry.
UK Fiduciary management outlook
The pension scheme landscape in the UK – and the role of pension fund trustees – is changing dramatically, but this isn’t just a theme for 2021: it will run for much longer. We believe this will drive further demand for fiduciary management services. In this outlook, we talk about what’s likely to happen over the next few years, provide some forecasts for 2021, and discuss some of Kempen’s plans for the year ahead.
Beat the benchmark thanks to data
Data – both financial and non-financial – are playing an increasingly important role in investment decisions. Anyone who manages to combine the right data sources and draw the right conclusions from them much increases their chances of outperforming the benchmark. With this in mind, Kempen has made big investments in its data and analysis capabilities. As our chief analytics officer Guido van Aubel says, this means “We can compete with the best.”
Remko van der Erf, Co-Head Alternative Strategies is an optimist. Whereas some investors are worried about the prospects for 2021, he mainly sees opportunity. That’s hardly surprising in a segment that tends to do well against a backdrop of volatility, diversity and restructurings. Van der Erf defines success as ‘positive returns with a low correlation’.
The economy is rapidly becoming sustainable and digital
What do our equity portfolio managers expect in 2021 and beyond? We spoke to the fund managers of our small-cap, dividend and sustainable equity strategies and our Global Impact Pool to find our. Optimism reigns, especially over the longer term : as they say, ‘We already hold tomorrow’s winners in the portfolio.’
The real estate market offers many opportunities to add value
Coronavirus has led to a considerable divergence in the fortunes of the different real estate sectors in 2020, but what should investors expect next year? We consider some of the trends to look out for.
Macro and Markets
When writing an outlook, it’s always tempting to say there’s a great deal of uncertainty. After all, the future is always uncertain. But where we normally still have a grip on relationships between economic variables such as growth, inflation, interest rates or valuations, now we’ve got the coronavirus to contend with on top of all that.
When it became clear that the coronavirus was morphing from a local Chinese epidemic into a global pandemic in early 2020, it was virtually impossible to forecast its exact impact on the global economy. For this reason, we set out a number of different possible scenarios of what might happen, which also considered the potential investment opportunities that might arise as a result. The scenarios ranged from one of rapid recovery to another of long-term malaise. All, of course, came with the necessary caveats.
The views expressed in this document may be subject to change at any given time, without prior notice. Kempen Capital Management N.V. (KCM ) has no obligation to update the contents of this document. As asset manager KCM may have investments, generally for the benefit of third parties, in financial instruments mentioned in this document and it may at any time decide to execute buy or sell transactions in these financial instruments.
The information in this document is solely for your information. This article does not contain investment advice, no investment recommendation, no research, or an invitation to buy or sell any financial instruments, and should not be interpreted as such. This document is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such.
The views expressed herein are our current views as of the date appearing on this document. This document has been produced independently of the company and the views contained herein are entirely those of KCM.
KCM is licensed as a manager of various UCITS and AIFs and to provide investment services and is subject to supervision by the Netherlands Authority for the Financial Markets.