Kempen European Property Fund NV

Profile

Kempen European Property Fund N.V. (KEPF) has the objective to achieve strong relative investment results by investing in a portfolio of listed European property companies. KEPF is managed on the basis of a bottom-up stock picking approach.

KEPF's strategy is to exploit mispricing between the valuation of property companies in relation to the quality of their real estate portfolios, balance sheets, corporate governance and management capability to add value to the property portfolio.

Management team

Matthijs Storm, Egbert Nijmeijer, Lucas Vuurmans, Anna Niegowska, Jorrit Arissen, Dan Petrisor

Performance per 2018-12-31 (rebased)

No chart data available

Performance per 2018-12-31

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  Fund Benchmark
1 month -5.3 % -4.9 %
3 months -9.2 % -8.7 %
This year -8.7 % -8.5 %
2015 21.5 % 18.0 %
2016 -3.8 % -5.3 %
2017 13.4 % 12.4 %
1 year (on annual basis) -8.7 % -8.5 %
3 years (on annual basis) i -0.1 % -0.9 %
5 years (on annual basis) i 8.6 % 7.5 %
Since inception (on annual basis) i 5.2 % 7.5 %
Untill 2014 the benchmark was the GPR 250 Europe Index, in which the UK component was reduced to 20%. Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. 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 356.12 M 2018-12-31
Share class size
EUR 356.12 M 2018-12-31
Number of shares
23,001,785 2018-12-31
Net Asset Value i
EUR 16.71 2019-01-24
Transaction price i
EUR 16.69 2019-01-24
Morningstar rating â„¢

Fund characteristics per 2018-12-31

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  Fund Benchmark
Number of holdings 28 107
Dividend yield i 2.95 % 3.61 %
Weighted average market capitalization i EUR 6,559 M EUR 7,365 M
P/E ratio i 3.98 6.99
Active share i 55.79 %
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Market developments per 2018-12-31

European property stocks were down 5% in December with KEPF slightly underperforming its benchmark. Relative performance was lost in the clusters European offices and European residential. Residential holding Adler posted negative returns mostly driven by concerns on bank debt covenants. Although we underwrite the too high LTV at the moment for Adler we are of the opinion they will be able to sell the for-sale retail portfolio and reduce the LTV to the targeted 55% thereby creating sufficient buffer towards covenants. In European offices Gecina continued its weak performance streak with another down month in December. We find it hard to explain the relative weak performance of Gecina in 2018 as the company’s operations continue to post good results, it has a strong balance sheet, and a management team with an excellent track record. The only concern we have is that shareholders Predica and Ivanhoe increase their grip on the Board reducing the independency of the Gecina Board. We are in continuous dialogue with Gecina to express our concerns on this front. Nevertheless, we feel the shares are attractively valued and remain our overweight Gecina position in KEPF. Positive relative performance was made in the UK with the underweight towards UK retail continuing to throw of relative performance.

Markets continue to be pressured on concerns of slowing economies worldwide, the protests in France, a potential hard Brexit outcome and the US/China trade war. In terms of real estate news, two items stood out. German residential company Vonovia acquired 2,300 residential units in Sweden for EUR450mn, continuing its European expansion. We are skeptical, and have been for a while, on Vonovia’s aggressive continental expansion in combination with an aggressive financial approach with high leverage and a largely unsecured bond portfolio. Any hiccup in the credit market potentially poses risks on future Vonovia re-financings. The second noteworthy news item came from the UK where residential company Grainger completed their 7 for 15 rights issue to finance the acquisition of the GRIP portfolio (London and Southeast England oriented residential portfolio). 96% of the rights were exercised indicating a brought receivership amongst existing shareholders. Gross proceeds amounted GBP333mn. We also exercised the rights for KEPF as in general we are supportive of the acquisition. It increased the quality of Grainger’s portfolio, increases its operational scale and accelerates the build-up of the private rental portfolio.

Portfolio developments per 2018-12-31

The Kempen real estate investment strategy strikes the balance between qualitative and quantitative analysis. Through application of data-analysis technology our Real Estate Team collects over 20 million relevant data points for 200,000 real estate buildings around the globe, processing this quantitative data in our data infrastructure and turning it into valuable fundamental investment information. The continuous increase in available data helps us make better assessments of the quality, value and risk of each real estate investment. In our opinion this leads to better investment decisions.

Next to the quantitative approach the investment strategy contains three key qualitative parameters that determine the warranted valuation: management added value, balance sheet strength and ESG. The portfolio managers score each company covered on these three parameters. Companies that excel in ESG for example will be assigned a higher score and hence the warranted valuation for an investment increases.

Portfolio construction of the Strategy is based on cluster neutrality. The European portfolio has 6 clusters defined as homogeneous groups of real estate companies with similar underlying currency exposure. Examples are United Kingdom, European residential and Switzerland. The portfolio weight of each cluster is approximately equal to the cluster’s benchmark weight. This ensures a diversified portfolio and neutralizes currency and macro-economic exposure versus the benchmark. KEPF assigns its risk budget on the real estate portfolio level only.

During the month we increased the management score of Shurgard at the expense of Icade. Shurgard’s management team enjoys a large opportunity set in continental storage where penetration and supply of storage boxes is low and ownership fragmented and mostly in private hands.
In terms of portfolio changes we increased our position in Fabege at the expense of Wihlborgs within the Nordics cluster.
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Performance per 2018-12-31 (rebased)

No chart data available

Performance per 2018-12-31

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  Fund Benchmark
1 month -5.3 % -4.9 %
3 months -9.2 % -8.7 %
This year -8.7 % -8.5 %
2015 21.5 % 18.0 %
2016 -3.8 % -5.3 %
2017 13.4 % 12.4 %
1 year (on annual basis) -8.7 % -8.5 %
3 years (on annual basis) i -0.1 % -0.9 %
5 years (on annual basis) i 8.6 % 7.5 %
Since inception (on annual basis) i 5.2 % 7.5 %
Untill 2014 the benchmark was the GPR 250 Europe Index, in which the UK component was reduced to 20%. Performance is shown after deduction of ongoing charges and including the reinvestment of dividend that has been paid out. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Dividends

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Distributing
Yes
Last dividend
EUR 0.62
Ex-date last dividend
2018-02-05
Number of distributions per year
1
Dividend calendar

Risk analysis (ex post) per 2018-12-31

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  3 years Since inception
Maximum drawdown i -12.15 % -74.77 %
Tracking error i 1.89 % 4.62 %
Information ratio i 0.38 -0.48
Beta i 1.02 1.05
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Top 5 contribution (2018-12-31)

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  Contribution i Performance i
Fabege 0.18 % 5.87 %
Hufvudstaden 0.04 % 1.32 %
Mobimo 0.02 % 0.62 %
Big Yellow 0.01 % 0.28 %
Entra ASA 0.01 % 0.32 %

Bottom 5 contribution (2018-12-31)

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  Contribution i Performance i
Unibail-Rodamco-Westfield -1.01 % -10.83 %
Gecina -0.68 % -8.50 %
Deutsche Wohnen -0.55 % -5.52 %
Adler Real Estate -0.45 % -13.77 %
Kojamo OYJ -0.44 % -12.19 %

Geographic allocation (2018-12-31)

27.0 %
United Kingdom
23.1 %
Germany
15.4 %
The Netherlands
13.6 %
Nordics
8.0 %
France
5.9 %
Switzerland
2.8 %
Belgium
2.7 %
Ireland
1.3 %
Spain
0.1 %
Other
Totaal
100 %
On basis of country of exchange of the investments. The cash position is included in ‘Other’.

Top 10 holdings (2018-12-31)

9.6 %
Deutsche Wohnen
8.8 %
Unibail-Rodamco-Westfield
7.5 %
Gecina
6.4 %
Land Securities
5.6 %
Segro
4.7 %
Vonovia SE
4.5 %
Derwent London
4.4 %
Fabege
3.9 %
Grainger Trust
3.4 %
Vastned Retail
Totaal
58.7 %

Sector allocation (2018-12-31)

30.1 %
Residential
29.9 %
Offices
24.9 %
Retail
11.6 %
Industrials
3.6 %
Other
Totaal
100 %
On basis of 'look through' data. The cash position is not included.
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Ongoing charges

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Management fee i
0.63 %
Service fee i
0.20 %
Expected ongoing charges i
0,83 %
Ongoing charges last financial year i
0.88 %
The Ongoing Charges Figure of the last financial year relates to 2017/2018.

The service fee is determined annually on basis of the net asset value as of the last day of the previous financial year:
< or equal to EUR 200 million: 0.25%
>EUR 200 million: 0.20%
The service fee has been decreased by 0.05% as of 1 October 2018. The expected ongoing charge factor of Fiscal Year 2018/2019 is therefore also decreased by 0.05%.

Other costs

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Upward swing factor i
0.40 %
Downward swing factor i
0.15 %
As of 14 January 2019 the swing factor has been adjusted from 0.40%/0.20% to 0.40%/0.15%.
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

Share class details

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Investor type
Institutional & Private
Distributing
Yes
Benchmark i
FTSE EPRA/NAREIT Developed Europe Index (dividends reinvested)
Investment category
Real Estate
Universum
European real estate equities
Inception date
2000-10-26
Domicile
The Netherlands
May be offered to all investors in
The Netherlands
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Management company
Kempen Capital Management N.V.
Custodian
BNP Paribas Securities Services S.C.A.
Morningstar rating â„¢

Tradability

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Listed
yes, listed on the NAV Trading Facility of Euronext
Subscription/Redemption Frequency
Daily
ISIN i
NL0009296649
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.
Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.

KCM Vision

Kempen Capital Management is an asset manager with a long-term investment approach. We strongly believe in engaged shareholdership that benefits all stakeholders. As a long-term responsible investor, we firmly believe that active ownership and shareholder engagement contribute to positive change across the board.

Our KCM wide approach to responsible investment

To put our vision into action we engage with our investment targets on a wide array of strategic, financial, environmental, social and governance (ESG) topics. Our long-term investment worldview paired with thorough analysis and an experienced and diverse ESG team allow us to use both voting and engagement as means to consistently encourage positive change. Through this process of constructive engagement, we are able to contribute to the development of principles and standards of corporate responsibility within companies that we invest in. Our full voting records are available here.

Our fund approach to Responsible Investment

ESG is fully integrated in our investment process for the real estate funds. We believe financial and sustainability returns are indivisible and that those companies that can find the right balance between all stakeholders will drive value. In our investment framework there are three key aspects we look at in determining the warranted valuation: management value add, balance sheet and ESG. We are willing to pay up for those companies that excel in ESG. This believe is underpinned by academic literature.

We track the CO2 intensity for all companies in our universe and use this information to for our assumption for capital expenditure in valuing the real estate portfolio. We do not only invest in the ESG leaders but also in the laggards as we the potential value to be unlocked by providing capital to those who need it the most is massive

Kempen Capital Management NV (KCM) is the management company of Kempen European Property Fund N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). The value of your investment may fluctuate. Past performance provides no guarantee for the future.