European Small-caps

There are three criteria for investment:

companies must display quality credentials that allow them to generate sustainably high returns on capital employed. Reinvesting at high returns drives economic value and share price performance;
companies must clearly demonstrate how ESG considerations are embedded in their business strategy. Every company faces material ESG risks that can have a direct impact on long-term share price performance; and
there must be an investment case. A quality company that embeds ESG is only a good investment where a valuation opportunity exists

We believe that the market is short-term focused and often misprices the compounding nature of quality companies. We take advantage of this through our long-term investment horizon of 3-5+ years. We run high conviction portfolios of 30-50 companies, where each position has a meaningful impact, without a tail of insignificant holdings.

We screen the investible universe on quality metrics and then undertake rigorous bottom-up research. Our team-based approach ensures that every investment is thoroughly challenged, while our ESG analyses is fully integrated into our investment process.

We have been successfully investing in European small-caps for twenty years, and running our Sustainable European Small-cap Strategy for fifteen.

Other small-cap strategies:

Our team

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News & Knowledge

2019, 05 December

Asset Allocation Outlook December

The MSCI global equity index noted gains for the third month in a row in November. A difference was discernible though between industrialised countries, which saw prices rise, and the slight price decreases in emerging markets. Capital market yields rose further, while the US saw an end to falling yields at the short end of the yield curve. This caused the spread on long-term and short-term yields to widen, which is a positive sign for the business cycle. The reasons behind the positive mood on the markets continue to be hopes of a trade agreement between the US and China, the diminishing risk of a hard Brexit and the bottoming-out of a number of leading economic indicators. We have reduced our cash position by expanding our overweight in emerging market debt. Our underweight in equities has been kept unchanged, however, as we still believe that the equity markets have priced in an excessively positive scenario for corporate earnings.

2019, 29 November

Kempen's Commentary

Before you start reading: please don’t take the following personally. It’s others and not you. The reason for this is that I have some bad news: we are not getting any smarter. In fact, we are all getting dumber. At least that’s what recent IQ tests suggest.

2019, 25 November

High yield in a broad perspective

The size of the fixed-income investment markets has grown considerably over the past decade. Existing investment classes have grown significantly, but also new fixed-income asset classes have become available to investors. The accommodative policy of central banks with low interest rates has spurred a search for yield that has led to an increase in capital made available for lending. At the same time, the past few years’ robust economic growth has led to a credit demand for growth, investments, mergers, and acquisitions. In emerging economies, particularly fixed-income markets in local currencies have shown significant growth.

European Small-caps

Other small-cap strategies:

Our team

Michiel van Dijk

Erwin Dut

Sander van Oort

Ingmar Schaefer

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News & Knowledge

Asset Allocation Outlook December

Kempen's Commentary

High yield in a broad perspective