As of 10 September 2019 Kempen (Lux) European Small-cap Fund is incorporated into Kempen (Lux) Sustainable European Small-cap Fund. Read the official announcement here.

Kempen Lux Sustainable European Small-Cap Fund - Class I

Profile

Kempen (Lux) Sustainable European Small-cap fund (the Fund) offers Investors the opportunity to invest in an actively and professionally managed portfolio of smaller listed European companies, while at the same time complying with strict exclusion and sustainability criteria. These are defined as companies with a maximum market capitalisation at the time of initial purchase of either EUR 5 billion, or the highest market capitalisation of any company included in the MSCI Europe Small Cap Total Return Index, whichever is the greater. The strategy primarily aims to generate a better long-term return than the benchmark.

The portfolio construction process involves a disciplined end to end framework initially utilizing proprietary in-house stock filters screening for high quality and attractively valued stocks. Thereafter,
fundamental in-house research is carried out to identify high conviction investment ideas. The end result is a portfolio of 30-50 stocks, well diversified across all regions and sectors.

On 10 September 2019 Kempen (Lux) European Small-cap Fund was incorporated into Kempen (Lux) Sustainable Small-cap Fund. You can find more information under the Documents tab.

Management team

Michiel van Dijk, Erwin Dut, Sander van Oort; Ingmar Schaefer

Performance per 2020-06-30 (rebased)

No chart data available

Performance per 2020-06-30

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  Fund Benchmark
1 month 1.9 % 1.3 %
3 months 20.8 % 18.7 %
This year -15.9 % -15.6 %
2017 12.1 % 19.1 %
2018 -18.3 % -15.9 %
2019 28.9 % 31.4 %
1 year (on annual basis) -9.2 % -4.1 %
3 years (on annual basis) i -3.5 % 0.2 %
5 years (on annual basis) i 1.0 % 3.6 %
Since inception (on annual basis) i 9.8 % 9.1 %
On 23 October 2013 Kempen SeNSe Fund (KSF) was merged with Kempen (Lux) Sustainable European Small-cap Fund (the Fund). In June 2011 the first institutional class of the Fund was launched. The results shown of the periods before June 2011 are those of KSF. KSF had a similar investment structure, a higher cost structure and a different tax regime that could have influenced the returns shown. Until 28 February 2017 the benchmark of the Fund was the MSCI Europe Small Cap Total Return Index, of which the constituents are adjusted by reducing the UK component by 50%. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 193.12 M 2020-06-30
Share class size
EUR 96.61 M 2020-06-30
Number of shares
55,183 2020-06-30
Net Asset Value i
EUR 1,838.47 2020-08-10
Turnover rate
55.71 %
Morningstar rating â„¢
The turnover rate figure is per the end of the financial year of the fund and will be updated once a year.

Fund characteristics per 2020-06-30

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  Fund Benchmark
Number of holdings 44 946
Dividend yield i 2.78 % 2.94 %
Weighted average market capitalization i EUR 2,704 M EUR 2,554 M
P/E ratio i 19.37 18.54
Active share i 92.48 %
Kempen (Lux) Sustainable European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Developments per 2020-06-30

In June the Fund (I-class) increased by 1.9% (net of fees), thereby outperforming the MSCI Europe Small-cap index which increased by 1.3% (for the performance of the other shareclasses please check the performance tab on the website https://www.kempen.com/en/asset-management).

Initially the strong stock market recovery seen in the second half of May continued in the first week of June, before reversing part of the initial share price gains. The positive sentiment turned around based on the fact that COVID-19 does not seem to be under control in a number of (Latin) American countries. In addition, new regional lockdowns were announced in China and Europe to fight COVID-19 outbreaks. Consequently discussions about the ‘second wave’ have flared up again. Finally, Central Banks are cautious and point to the risk that the economic recovery may be slow. We saw a string of companies using the recent share price strength to issue new shares. We have participated in some of these issuances. Despite the dilution share prices responded positively as the investment cases are derisked to a large extent. Although the earnings season has not taken off yet, the preliminary trading updates are mostly inline with earlier comments and expectations and suggest a cautious recovery of business activity after the low seen in April.

During the month we completely sold one UK real estate name for tax reasons and added three new names to the portfolio. It remains difficult to predict the future development of the COVID-19 virus, its economic consequences and the green shoots of normalization. We remain in close contact with the management teams of the companies we invest in. Depending on the individual circumstances, companies are working through the slowdown in economic activity, the relaxation of lockdown measures and are preparing for the new normal. We believe that equity markets increasingly price in a fairly quick normalization scenario. We still see strong long-term potential for our portfolio holdings but remain focused on near-term earnings risks and their balance sheet strength. As flagged earlier we continue to focus on the margin of safety in our valuations and remain cautious in estimating a recovery scenario in our models.

The best performing stocks in the portfolio in June were Dialog Semiconductor, Bunzl and BESI. Dialog Semiconductor shares rebounded another 14% in June. In May the company guided Q2 materially ahead of consensus and at the end of June Dialog stated that Q2 results would even come in above the high end of the previously guided range. Dialog also made positive comments on the Q3 report which we see as an indication of the confidence management has. Our investment case has not changed. We have a lot of trust in Dialog's management team and the stock remains attractively valued, while the strong balance sheet provides downside protection in an uncertain environment. Bunzl (+13.6%) released a good trading statement in June. While several companies report revenue reductions driven by the effects from COVID19, Bunzl reported organic growth of 2% as demand in safety, cleaning & hygiene and healthcare has offset declines in foodservice and retail. Due to this mix change and more demand for private label solutions there will also be a positive effect on the margin. BESI (+15.5%) held a presentation during an analyst session. Besides what we already know that BESI performance is best in class, the company gave more details on its technological roadmap and future growth opportunities. Higher accuracy, greater miniaturization and increased complexity will continue to drive demand for advanced packaging. We believe BESI is excellently positioned to reap the benefits from these trends with new (generation) systems and strong customer relations.

The worst performing stocks in the portfolio in June were Hikma, Fagron and Greggs. In the risk-on mood of global and European equity markets at the beginning of the month, the shares of Hikma Pharmaceuticals (-14.5%) had a negative start. The share price recovered as the mood of investors turned. However, on June 22 a larger shareholder sold its entire 16.5% stake in the company. The shareholder in question, sector peer Boehringer Ingelheim, received this share package as part of payment for an acquisition in 2015. Hikma shares have lagged the index since the sale as, in our view, investors are cautious with respect to the reasons behind the disposal of this larger shareholder. In line with the close relationships that we have with the companies that we invest in, we have since been in contact with Hikma Pharmaceuticals and see no particular reasons for concern. We have seen another disposal of shares from an existing shareholder at Fagron (-13.0%). Alychlo, the investment vehicle of Marc Coucke sold 4.2% of the company but remained a 10.7% shareholder after this transaction. In our view, the disposal served to generate cash which could subsequently be injected into other investments held by Alychlo like a zoo and a football club which are more troubled by the consequences of COVID19. We are also mindful of currency fluctuations in the countries where Fagron is active but believe that the company can apply several mitigating actions to soften the resulting impact on its profitability. Although it is positive that Greggs (-13.2%) announced to reopen 800 out of 2.050 shops in the course of June, the company’s key challenge remains how to reach its pre COVID-19 productivity during peak hours (breakfast and lunch time) in times of social distancing and low commuter traffic. Click & collect and work from home customers may open up new commercial opportunities but may take some time to offset.

ESG commentary
As a participant of the Platform Living Wage Financials (PLWF) we get together with allied financial institutions to encourage, support, assess, and monitor investee companies with regard to their commitment to paying a living wage to workers in their operations and supply chains. As recognized by, among others, the International Labour Organisation (ILO) and the OECD, living wage is a fundamental human right. With two years of experience in living wage assessment and engagement, the alliance further improved its assessment methodology and engagement priorities for 2020. We continue to work with Coats Group, a UK based yarn manufacturer, on their living wage approach and disclosure. In June we continued our engagement on worker protection during the COVID-19 pandemic, addressing subjects such as prudent financial management, value chain resilience and flexibility around delivery dates, layoffs, part-time working arrangements, sick leave and many more. Furthermore, we are in the process of applying the 2020 living wage methodology to assess Coat's policies and disclosures. The results of the scoring will be made available in the second half of the year.

Kempen (Lux) Sustainable European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Performance per 2020-06-30 (rebased)

No chart data available

Performance per 2020-06-30

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  Fund Benchmark
1 month 1.9 % 1.3 %
3 months 20.8 % 18.7 %
This year -15.9 % -15.6 %
2017 12.1 % 19.1 %
2018 -18.3 % -15.9 %
2019 28.9 % 31.4 %
1 year (on annual basis) -9.2 % -4.1 %
3 years (on annual basis) i -3.5 % 0.2 %
5 years (on annual basis) i 1.0 % 3.6 %
Since inception (on annual basis) i 9.8 % 9.1 %
On 23 October 2013 Kempen SeNSe Fund (KSF) was merged with Kempen (Lux) Sustainable European Small-cap Fund (the Fund). In June 2011 the first institutional class of the Fund was launched. The results shown of the periods before June 2011 are those of KSF. KSF had a similar investment structure, a higher cost structure and a different tax regime that could have influenced the returns shown. Until 28 February 2017 the benchmark of the Fund was the MSCI Europe Small Cap Total Return Index, of which the constituents are adjusted by reducing the UK component by 50%. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Dividends

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Distributing
No

Risk analysis (ex post) per 2020-06-30

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  3 years Since inception
Maximum drawdown i -30.36 % -62.09 %
Tracking error i 5.39 % 5.11 %
Information ratio i -0.69 0.14
Beta i 1.03
Kempen (Lux) Sustainable European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Top 5 contribution (2020-06-30)

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  Contribution i Performance i
Dialog Semiconductor 0.49 % 14.34 %
Bunzl 0.42 % 13.61 %
BE Semiconductor Industries 0.37 % 15.53 %
ASR Nederland 0.34 % 10.69 %
TKH Group 0.21 % 10.52 %
Percentages shown for contributions and performances are based on Euros.

Bottom 5 contribution (2020-06-30)

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  Contribution i Performance i
Hikma Pharmaceuticals -0.42 % -14.28 %
Fagron -0.30 % -13.01 %
Greggs -0.22 % -13.23 %
JC Decaux -0.18 % -9.51 %
Huhtamaki -0.11 % -3.52 %
Percentages shown for contributions and performances are based on Euros.

Geographic allocation (2020-06-30)

30.5 %
United Kingdom
13.9 %
Netherlands
10.1 %
Germany
9.1 %
Sweden
5.9 %
Luxembourg
4.7 %
Norway
3.6 %
Belgium
3.2 %
Finland
3.1 %
Spain
2.9 %
Austria
2.7 %
Ireland
2.6 %
France
1.7 %
Denmark
3.1 %
Other
2.9 %
Cash
Total
100 %

Top 10 holdings (2020-06-30)

3.7 %
Dialog Semiconductor
3.4 %
ASR Nederland
3.3 %
Arcadis
3.2 %
Huhtamaki
3.2 %
Bunzl
3.1 %
Bakkafrost
3.1 %
Bravida
3.1 %
Coats
3.1 %
Sbanken
2.9 %
BAWAG Group
Total
32.0 %

Sector allocation (2020-06-30)

25.1 %
Industrial Goods & Services
12.7 %
Technology
10.5 %
Food & Beverage
6.4 %
Construction & Materials
6.0 %
Banks
5.9 %
Health Care
5.8 %
Insurance
3.6 %
Retail
3.3 %
Oil & Gas
2.7 %
Ireland
2.6 %
England
2.9 %
Other
12.5 %
Overig
Total
100 %
Kempen (Lux) Sustainable European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

 

SWING FACTORS

An overview of the current swing factors are available here.

Ongoing charges

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Management fee i
0.70 %
Service fee i
0.20 %
Taxe d'abonnement i
0.01 %
Expected ongoing charges i
0.91 %
Kempen (Lux) Sustainable European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Share class details

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Share class
I i
Investor type
Institutional
Distributing
No
Benchmark i
MSCI Europe Small Cap Total Return Index
Investment category
Small-caps
Universum
Sustainable European Small- & Mid-caps
Inception date
2011-06-27
Domicile
Luxembourg
May be offered to professional investors only in
Belgium, Finland, France, Germany, Italy, Luxembourg, Sweden, Switzerland, The Netherlands, United Kingdom
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Management company
Kempen Capital Management N.V.
Depositary and custodian
J.P. Morgan Bank Luxembourg S.A.
Morningstar rating â„¢

Tradability

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Minimum subscription
Initial subscription: €50,000, additional subscriptions: €10,000
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU0427934699
Kempen (Lux) Sustainable European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.
Kempen (Lux) Sustainable European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Kempen's vision & mission

Kempen Capital Management is an asset manager that believes in stewardship and investment focusing on the long-term for the benefit of all stakeholders. Value creation is at the heart of the services we provide to our clients. We believe that being an engaged shareholder on environmental, social and governance (ESG) issues and retaining a long-term focus, is critical to helping our clients to preserve and create sustainable wealth that has positive real world impact and economic returns.

Kempen wide approach to responsible investment

We are committed to create sustainable alpha. The four pillars of our ESG-policy are:

  • ESG integration: Ensuring sustainability risks and opportunities are adequately considered in our investment analysis and processes.

  • Exclusion & avoidance: Not investing in companies involved in controversial activities or conduct.

  • Active ownership: Being responsible stewards of our clients’ capital and using our influence through engagement and voting to improve corporate behaviour on specific ESG issues and achieve positive change

  • Positive impact: Investing with an objective to achieve positive real world outcomes and impact, such as contributing to the UN Sustainable Development Goals.

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To put our mission and vision into practice we engage with our investee companies on a wide array of strategic, financial, and ESG topics. As an active owner we use our influence to improve our investee companies’ ESG performance.  This helps us address some of the most pressing and important sustainability issues facing business and the world. Our focus themes for engagement are: human rights, labour rights, climate change and governance.

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Through collaboration with other investors and industry think tanks we contribute to the development of principles and standards of corporate responsibility both at sector levels, as well as investee company level.

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Our full voting records are available here.

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OUR FUND APPROACH TO RESPONSIBLE INVESTMENT

The investment objective of Kempen (Lux) Sustainable European Small-cap Fund is to offer investors the opportunity to invest in an actively and professionally managed portfolio of smaller listed European companies, while at the same time complying with strict exclusion and sustainability criteria.

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We strive to invest in a portfolio of companies that has a carbon intensity well below the benchmark. Furthermore, we engage with the most carbon intense companies in our portfolio in order to improve disclosure and policies that should contribute to a reduction in carbon intensity.

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Kempen’s ESG policy is implemented in our fund’s investment process by the following pillars: Exclusion, Integration and Active ownership.

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Exclusion & Avoidance

In line with the general Kempen policy, the European Sustainable Small-cap Fund excludes all companies on the KCM Exclusion- or Avoidance list.

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Companies that ‘Fail’ or are on ‘Watchlist’ marked against the criteria of the United Nations Global Compact are excluded.

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We determine a company’s ESG score (1-5) and exclude companies with a score of 1. Companies with a score of 2 are excluded on a comply or explain basis.

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The Sustainable European Small-cap Fund also excludes companies based on additional sustainability criteria as listed in the table below.

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More information on our exclusion criteria and thresholds can be found here.

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EXCLUSION CRITERIA KEMPEN (LUX) SUSTAINABLE EUROPEAN SMALL-CAP FUND

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KEMPEN CRITERIA

ADDITIONAL SUSTAINABILITY CRITERIA

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Business Conduct

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x    Human Rights

V

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x    Labour

V

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x    Environment

V

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x    Anti-corruption

V

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Product Involvement

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x    Controversial Weapons

V

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x    Tobacco

V

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x    Adult Entertainment

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V

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x    Alcohol

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V

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x    Animal Welfare & GMO

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V

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x    Gambling

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V

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x    Power Generation Nuclear

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V

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x    Power Generation Carbon Intensive

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V

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x    Thermal Coal

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V

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x    (Un)conventional Oil & Gas Extraction

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V

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x    Weaponry

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V

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ESG integration

In the investment process we assess the ESG profile of a company. We assess each company on a case-by-case basis, taking into account material risks in a given industry in combination with the company’s respective risk exposure, practices and disclosure.

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A lower score (1-5) requires a higher return as used in our Discounted Cash Flow (DCF) models. If ESG risks are deemed too severe, an investment in the company will be avoided and/or existing holdings will be sold.

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On a quarterly basis, the Kempen Responsible Investment team screens the holdings of the Kempen Sustainable European Small-cap Fund and discusses the findings with the portfolio managers.

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Active ownership: Engagement

As active investors we perform comprehensive engagements with our portfolio companies with the objective to unlock value and reduce risk.

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Our engagement process defines clear objectives of which the progress and result is tracked and well documented. If at any stage the company refuses to cooperate, divestment has to be considered.

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In the first half of 2019, we engaged with 13 companies on strategic, environmental, social and governance issues.

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Active ownership: Voting

Exercising our voting rights is also an essential part of our responsible investment philosophy. ISS provides us with voting recommendations based on our own voting and governance policy. Items are further analyzed on a case by case basis.

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Often, we inform the company about our voting intention ahead of the meeting and, where there is a recommendation to vote against management, we ask the company to clarify their viewpoints. After careful analysis, we form our own opinion and vote accordingly.

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Our full voting records are available here.

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Risks

For more information about the mid and long term risks associated with the investments:

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Although Kempen Capital Management N.V.’s information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the “ESG Parties”), obtain information from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness of any data herein. None of the ESG Parties makes any express or implied warranties of any kind, and the ESG Parties hereby expressly disclaim all warranties of merchantability and fitness for a particular purpose, with respect to any data herein. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein. Further, without limiting any of the foregoing, in no event shall any of the ESG Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

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ESG integration in the investment process
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disclaimer
Kempen (Lux) Sustainable European Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by the Dutch Authority for the Financial Markets (AFM).

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Esch-sur-Alzette, Zurich Branch, Bleicherweg 7, CH-8027 Zurich. The Sub-Fund is registered with the Dutch Authority for the Financial Markets (AFM) under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch, English and several other languages, see website) and the prospectus (available in English). These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English.

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.