Kempen (Lux) Global Small-cap Fund - Class I GBP

Profile

Kempen (Lux) Global Small-cap Fund (the Fund) invests primarily in global smaller listed companies, with maximum market value at the time of the initial purchase of €4bn, or the highest value of any company included in the benchmark, whichever is greater. The benchmark is the MSCI World Small Cap Index. The Fund 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 approximately 60 - 90 stocks, well diversified across all regions and sectors.

Management team

Jan Willem Berghuis, Maarten Vankan, Chris Kaashoek, Luuk Jagtenberg

Performance per 2018-12-31 (rebased)

No chart data available

Performance per 2018-12-31

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  Fund Benchmark
1 month -8.9 % -9.1 %
3 months -12.0 % -15.8 %
This year -4.8 % -8.5 %
2015 6.0 % 5.5 %
2016 46.2 % 34.4 %
2017 17.1 % 12.0 %
1 year (on annual basis) -4.8 % -8.5 %
3 years (on annual basis) i 17.7 % 11.3 %
Since inception (on annual basis) i 13.1 % 10.2 %
Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future. As of 30 June 2018 a deviating Net Asset Value (NAV) is used for the calculation of the performance figures. This NAV is calculated based on closing prices of the Fund investments thereby deviating from the NAV which was originally issued and partly calculated based on snapshots (Asia & Pacific investments). The deviating NAV is used to make a better comparison with the benchmark, which is also solely based on closing prices of the investments. This share class (I-GBP) of the Kempen (Lux) Global Smallcap Fund (the Fund) was launched on the 22st of June 2018. Performances shown in periods before the launch date of the (I-GBP) share class are those of Kempen (Lux) Global Smallcap Fund share class (I-EUR). The track record is adjusted by converting the return series from the EUR share class into GBP return series by compounding the original returns and the returns of the currency spot prices from the 8th of July 2014 until the launch date of the GBP Class.
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 315.29 M 2018-12-31
Share class size
GBP 2.28 M 2018-12-31
Number of shares
2,529 2018-12-31
Net Asset Value i
GBP 948.08 2019-01-23

Fund characteristics per 2018-12-31

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  Fund Benchmark
Number of holdings 76 4380
Dividend yield i 2.55 % 2.27 %
Weighted average market capitalization i EUR 2,156 M EUR 2,523 M
P/E ratio i 8.51 11.26
Active share i 97.71 %
Kempen (Lux) Global 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 Netherlands Authority for the Financial Markets. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

Market developments per 2018-12-31

The year 2018 ended on a volatile note. December was a very soft month with the Fund (I-class) down 9.9% and the MSCI World Small-cap index down 10.1%. The Fund (I-class) outperformed its benchmark by 0.2% over the month. For the full year, the Fund (I-class) is down 5.5% after costs, versus the benchmark that is down 9.5%, yielding a 4.0% outperformance. Substantially all the outperformance was driven by stock selection. Throughout the year,our value style has been a headwind, with the MSCI World small-cap value index down 11.7% for the year. In 2018 the Fund performed well versus our peers. For the full year, the Fund ranked in the top quartile of our Morningstar global small-cap peer group. On a three-years rolling basis, we currently rank number 1 in the Morningstar peer group. We continue to see strong interest in our strategy from international investors. While we realize declines in the stock markets are always painful for our shareholders in the short-term, we also know from our experience that particularly in these markets an active manager can make a real difference. The MSCI World Small-cap index declined approximately 18% from the recent peak to through, however many stocks saw declines of 40-60% or more. We have added and will add to our portfolio stocks that are oversold and are focused to find a few new, high quality stocks that are heavily oversold.

Three top contributing stocks during the month of December were Otello Corporation (+4%), Del Frisco’s Restaurant Group (+13%) and Protector Forsikring (+4%). Otello Corporation's stock price was up 4% in December. We discussed the stock in our November monthly. As we disclosed one month ago we added significantly to our position as we view the risk reward as extremely compelling. The downside risk is very low in our view with the stock trading in the NOK 12-14 range due to the strong balance sheet which is debt free while the upside potential is about 100% in our base case scenario. The Fund made a 13% return on our position in Del Frisco’s Restaurant Group (DFRG). This is materially higher than the 3% return of the stock in December (in EUR), due to our timing and the execution skills of our trading team. We rebought a position in the stock that we had exited earlier in the year, after activist investor Engaged Capital took a 9.99% stake. We think the Board of Directors (BoD) can only pursue a sale of the company in its entirety or in pieces given the pressure that has arisen from shareholders after recent missteps by the leadership team. We shared our view on this with the BoD as well. We believe the value of the four restaurant concepts DFRG owns, is higher than the current Enterprise Value. Protector's share price was up 4% despite an additional warning on the change of ownership insurance business. The change of ownership insurance contracts protects homesellers against claims of buyers. These contracts experienced elevated claims related to gray silverfish. The company also announced it is considering strategic options for the change of ownership business. Since the company has taken a substantial provision in 2018 against claims that could arise in 2019, the future impact of the silverfish issue is limited.

Negative contributors in November were Luxfer (-24%), MRC Global (-23%), and Brunswick (-13%). Luxfer's share price was down 24% in December after a strong share price performance for the year up until November (+58%). On 18 December, Luxfer announced a large acquisition, thereby doubling its current size. The market reacted adversely to this announcement. We do believe strategically the acquisition makes sense for the longer term, because the combination creates a global market leader in rare earth and rare metal-based materials. However, given the size of the deal and as it is partly financed with debt, this changes the risk profile of the firm. We are happy with a lower portfolio weight, since we had been reducing our position at higher share price levels since the summer. MRC Global was down 23% in December as a further decline in the oil price during the month pressured sentiment. MRC is a leading distributor of pipes, valves and fittings used in the oil & gas industry and thus exposed to the energy sector. The recent oil price volatility occurred at the time when the industry sets next year's budgets, which in turn implies softer growth for MRC in 2019. However, in our view the market now prices in a worse outlook than what we feel is realistic. With early indications for flat to up mid-single digit upstream capex spend in 2019 we consider the current share price of MRC attractive. Brunswick's stock was down 13% in December which was only slightly worse than the benchmark. Due to the fund's heavy weight in the stock it was still the third largest negative contributor. The stock specific news flow was positive in December. At the end of the month Brunswick disclosed it has been granted exclusions from Section 301 tariffs for some of its engines. At the midpoint of guidance this provides a $13mn pre-tax benefit to 2019 earnings.

 

The latest Quarterly you will find here.

Portfolio developments per 2018-12-31

The Fund invests world-wide in smaller companies (small-caps). One attractive feature of small-caps is that they are generally monitored by a small number of analysts, which leaves plenty of opportunity to add value as active investors. When looking for new investment opportunities, screening is applied to reduce the investment universe to a manageable size of 500 companies. We screen for companies that are of above-average quality and that are attractively valued. Extensive fundamental analysis is done on both existing portfolio companies and new portfolio candidates. This includes analysis of the company’s public filings (like annual reports) and comprehensive dialogues with the management teams of companies that we invest in. For each stock we base our investment decision on an extensive investment case, which is supported by a proprietary financial model. ESG topics (Environmental, Social and Governance) are fully integrated in our investment process. The result is a well-diversified portfolio of 60-90 companies spread across sectors and regions. Many portfolio companies have leading positions in the niche markets in which they operate. The companies in the portfolio typically have robust balance sheets and high returns on capital employed, which indicates that these companies are structurally capable of increasing shareholder value via their operations. The portfolio has a more attractive price earnings ratio versus the benchmark.
Kempen (Lux) Global 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 Netherlands Authority for the Financial Markets. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

Performance per 2018-12-31 (rebased)

No chart data available

Performance per 2018-12-31

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  Fund Benchmark
1 month -8.9 % -9.1 %
3 months -12.0 % -15.8 %
This year -4.8 % -8.5 %
2015 6.0 % 5.5 %
2016 46.2 % 34.4 %
2017 17.1 % 12.0 %
1 year (on annual basis) -4.8 % -8.5 %
3 years (on annual basis) i 17.7 % 11.3 %
Since inception (on annual basis) i 13.1 % 10.2 %
Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future. As of 30 June 2018 a deviating Net Asset Value (NAV) is used for the calculation of the performance figures. This NAV is calculated based on closing prices of the Fund investments thereby deviating from the NAV which was originally issued and partly calculated based on snapshots (Asia & Pacific investments). The deviating NAV is used to make a better comparison with the benchmark, which is also solely based on closing prices of the investments. This share class (I-GBP) of the Kempen (Lux) Global Smallcap Fund (the Fund) was launched on the 22st of June 2018. Performances shown in periods before the launch date of the (I-GBP) share class are those of Kempen (Lux) Global Smallcap Fund share class (I-EUR). The track record is adjusted by converting the return series from the EUR share class into GBP return series by compounding the original returns and the returns of the currency spot prices from the 8th of July 2014 until the launch date of the GBP Class.

Dividends

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Distributing
No

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

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  3 years Since inception
Maximum drawdown i -13.91 % -13.91 %
Tracking error i 4.74 % 4.98 %
Information ratio i 1.35 0.67
Beta i 0.94
Kempen (Lux) Global 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 Netherlands Authority for the Financial Markets. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

Top 5 contribution (2018-12-31)

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  Contribution i Performance i
Otello Corp 0.10 % 4.22 %
Del Frisco's Restaurant 0.08 % 12.75 %
Protector Forsikring 0.04 % 3.60 %
Hufvudstaden 0.01 % 1.31 %
Mixi 0.01 % 0.00 %

Bottom 5 contribution (2018-12-31)

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-10.72 %
  Contribution i Performance i
Luxfer (US) -0.53 % -23.91 %
MCR Global -0.39 % -22.99 %
Brunswick -0.39 % -13.30 %
U.S. Silica -0.36 % -28.56 %
Dena -0.33 %

Geographic allocation (2018-12-31)

54.7 %
North America
30.6 %
Europe Middle East and Africa (EMEA)
11.3 %
Japan
2.7 %
Asia Pacific ex Japan
0.7 %
Other
Totaal
100 %
The cash position is included in ‘Other’.

Top 10 holdings (2018-12-31)

3.0 %
First Solar
3.0 %
Brunswick
2.9 %
Dena
2.7 %
Western Forest Products
2.6 %
LHC Group
2.5 %
Thermon Group
2.2 %
Otello Corp
2.2 %
Vesuvius
2.1 %
RenaissanceRe
2.0 %
Enersys
Totaal
25.2 %

Sector allocation (2018-12-31)

24.2 %
Industrials
23.4 %
Financials
13.6 %
Technology
11.2 %
Consumer goods
10.4 %
Consumer services
7.2 %
Basic Materials
5.4 %
Health Care
2.8 %
Oil & gas
1.2 %
Telecommunications
0.7 %
Other
Totaal
100 %
The cash position is included in ‘Other’.
Kempen (Lux) Global 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 Netherlands Authority for the Financial Markets. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

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 %

Other costs

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Upward swing factor i
0.30 %
Downward swing factor i
0.25 %
Kempen (Lux) Global 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 Netherlands Authority for the Financial Markets. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

Share class details

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Share class
I - GBP i
Investor type
Institutional
Distributing
No
Benchmark i
MSCI World Small Cap Index
Investment category
Small-caps
Universum
Global Small- & Mid-caps
Inception date
2018-06-22
Domicile
Luxembourg
May be offered to professional investors only in
Luxembourg, The Netherlands, United Kingdom
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
GBP
Management company
Kempen Capital Management N.V.
Custodian
J.P. Morgan Bank Luxembourg S.A.

Tradability

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Minimum subscription
Initial subscription £50,000, additional subscriptions £10,000
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU1833119990
Kempen (Lux) Global 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 Netherlands Authority for the Financial Markets. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.
Kempen (Lux) Global 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 Netherlands Authority for the Financial Markets. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.

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

Exclude

Screen on controversies using MSCI ESG research

Exclude companies based on UNGC criteria

Exclude tobacco, weapons producers, pornography and gambling companies.

Avoid companies with high ESG risk in Quick Scan

Integrate

Form own ESG opinion and score in investment case (1-5)

Look for sustainable business models and practices

Require higher return for lower ESG score

Engage

Review ESG profile of portfolio on quarterly basis

Take responsibility by engaging with companies

Document all engagement and controversial voting items

Kempen (Lux) Global 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 Netherlands Authority for the Financial Markets. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).

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.