Kempen Orange Fund NV

Profile

Kempen Orange Fund N.V. invests in smaller and medium-sized Dutch companies that are included in the GPR Dutch Small Cap Index. The fund can also invest in Dutch and Belgian companies which are not included in the Index, provided that their market capitalisation is less than € 5 billion at the time of purchase. Investments in Belgian companies may not exceed 20% of the fund’s portfolio. The environmental, social and governance (ESG) criteria are incorporated in the investment process.

The fund positions itself as an engaged shareholder.

Kempen Orange Fund N.V. has the objective to earn a structurally higher return (capital gain and dividends) than its benchmark: GPR Dutch Small Cap Index.

Management team

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

Performance per 2021-02-28 (rebased)

No chart data available

Performance per 2021-02-28

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  Fund Benchmark
1 month 3.9 % 2.8 %
3 months 10.5 % 11.4 %
This year 7.7 % 7.8 %
2018 -20.0 % -17.8 %
2019 34.7 % 37.8 %
2020 15.2 % 14.6 %
1 year (on annual basis) 31.2 % 33.5 %
3 years (on annual basis) i 9.8 % 11.0 %
5 years (on annual basis) i 14.3 % 15.2 %
Since inception (on annual basis) i 11.5 % 9.7 %
Untill 1 januari 2004 was de benchmark de CBS Small Cap Index. 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 154.50 M 2021-02-28
Share class size
EUR 154.50 M 2021-02-28
Number of shares
1,311,044 2021-02-28
Net Asset Value i
EUR 131.82 2021-04-09
Transaction price i
EUR 132.09 2021-04-09
Morningstar rating â„¢
Morningstar Analyst rating
Silver

Fund characteristics per 2021-02-28

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  Fund Benchmark
Number of holdings 25 60
Dividend yield i 2.81 % 1.61 %
Weighted average market capitalization i EUR 2,725 M EUR 2,626 M
P/E ratio i 16.59
Active share i 40.95 %
Kempen Capital Management N.V. (KCM) is the management company of Kempen Orange Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

Developments per 2021-02-28

KOF climbed by 3.9% in February, while the GPR Dutch Small Cap Index earned a return of 2.8%. KOF’s Net Asset Value increased by 7.7% in the first two months of the year versus a rise of 7.8% for the benchmark.

Financial markets have priced in higher inflation forecasts for some time now based on the rising US bond yields. This trend is no surprise given the limitless availability of (free) money pumped into the financial system by central banks over the past months. The economic recovery in Europe remains fragile, however, so the higher inflation forecasts could be rather inopportune for many of the central banks. The question of whether and how central banks will respond to this will dominate the financial markets in the coming months.

The vast majority of companies that have reported earnings exceeded expectations somewhat. In general, restrictions under the second lockdowns imposed in many countries are having a less negative impact than they did during the first lockdown. The difference between sectors is greater than ever, however. For instance, players in the semiconductor industry (BESI, ASMI) can barely keep up with demand and are looking forward to the next six months with confidence thanks to well-filled order books. Many manufacturing companies are profiting from the fact that stock levels are extremely low in the value chain in the wake of many companies deciding to reduce working capital in 2020 (e.g. Aalberts). Nevertheless, higher commodity (copper, steel) and transport costs could still throw a spanner in the works. Finally, we are also seeing companies that are being severely affected by COVID-19 managing to slash costs and consolidate their balance sheets to ensure they are in top form to profit as much as they can when things start to normalise (e.g. Sligro).

The largest increases to positions in the KOF portfolio in February were to Aalberts, Signify and Sligro. The biggest sales were of IMCD, Basic-Fit and BESI. Over the course of the month a position was accrued in Heijmans and the position in Basic-Fit was sold in its entirety. We believe that Basic-Fit’s equity price has priced in much of its future growth. Despite a share issue in 2020, zero growth in the number of members and the prospect of a poor cash conversion rate, because existing members are able to use the clubs for free for a time in compensation for when they were closed, its equity price reached a new all-time high. In addition, other positions were adjusted based on changes to the model portfolio driven by valuations and upward price potential.

While the results reported by Ordina were in-line with expectations, the surprise factor was the proposal to pay shareholders 100% of the annual profit in the shape of a dividend. The company’s solid net cash position and the fact that the greater part of the uncertainty surrounding the impact of COVID-19 is now behind us lead us to view this as a positive step. As the elements that squeezed revenue growth in the Netherlands (2/3 of the revenue) have largely dissipated and we expect Belgium to continue its current growth trend, we anticipate an acceleration in revenue in the coming years. With the ambition of increasing the share of revenue from the five selected (high margin) growth segments from the current level of 38% to 65% in 2022, we suspect that the present EBITDA margin target of 10-12% is on the cautious side. At conservative estimates the equity continues to be cheap in our opinion.

ASR reported exceedingly solid annual results. The negligible COVID-19 impact on its results confirms the strength of a combined portfolio of both non-life and life insurance policies. The fact that the regulator has given ASR permission to implement a new share buyback programme of €75 million in addition to paying the regular dividend of €2.04 per share is further proof of the insurer’s robust capital position. Despite the low interest rates, the company still anticipates a sufficient level of reward to be able to realise its original medium-term goal of €500 million in organic capital generation a year in 2021 as well. This demonstrates that the company possesses enough flexibility to earn a higher return on its investments, expand the business further and/or cut operating costs further. Although interest rates are primarily rising in the US at the moment, a scenario of higher rates in Europe would of course also be positive for ASR.

When presenting the annual results the new Intertrust CEO reiterated the company’s revenue growth target of 4-6% for the medium term, which will generate sound operational leverage. Both revenue growth and margin improvements were below expectations in the past few quarters due to uncertainty among customers caused by the US presidential elections and Brexit. Conversely, the construction of a Center of Excellence in India led to duplicate costs that peaked in the second quarter of 2020. Decreasing uncertainty among customers, the elimination of the duplicate costs and the fact that the business model is not capital intensive and therefore generates large cashflows will move things in the other direction from 2021 and in doing so reveal the company’s significant undervaluation.

Kempen Capital Management N.V. (KCM) is the management company of Kempen Orange Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

Performance per 2021-02-28 (rebased)

No chart data available

Performance per 2021-02-28

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  Fund Benchmark
1 month 3.9 % 2.8 %
3 months 10.5 % 11.4 %
This year 7.7 % 7.8 %
2018 -20.0 % -17.8 %
2019 34.7 % 37.8 %
2020 15.2 % 14.6 %
1 year (on annual basis) 31.2 % 33.5 %
3 years (on annual basis) i 9.8 % 11.0 %
5 years (on annual basis) i 14.3 % 15.2 %
Since inception (on annual basis) i 11.5 % 9.7 %
Untill 1 januari 2004 was de benchmark de CBS Small Cap Index. 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 2.50
Ex-date last dividend
2020-06-05
Number of distributions per year
1
Dividend calendar

Risk analysis (ex post) per 2021-02-28

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  3 years Since inception
Maximum drawdown i -25.65 % -59.19 %
Tracking error i 4.81 % 5.74 %
Information ratio i -0.26 0.32
Beta i 0.88 0.88
Kempen Capital Management N.V. (KCM) is the management company of Kempen Orange Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

Top 5 contribution (2021-02-28)

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  Contribution i Performance i
BE Semiconductor Industries 0.81 % 10.17 %
Ordina 0.53 % 15.11 %
Nedap 0.51 % 14.26 %
Kendrion 0.43 % 10.48 %
ASR Nederland 0.38 % 8.37 %

Bottom 5 contribution (2021-02-28)

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  Contribution i Performance i
Signify -0.61 % -8.16 %
Telenet Group Holdin TELENET GROUP HOLDIN -0.19 % -5.93 %
Arcadis -0.11 % -2.29 %
Corbion -0.07 % -2.10 %
Fagron -0.04 % -3.09 %

Geographic allocation (2021-02-28)

92.4 %
Netherlands
4.6 %
Belgium
3.0 %
Cash
Total
100 %

Top 10 holdings (2021-02-28)

7.8 %
SBM Offshore
7.7 %
BE Semiconductor Industries
7.2 %
Signify
6.3 %
Arcadis
5.5 %
TKH Group
5.1 %
Aalberts
5.0 %
ASR Nederland
4.6 %
Kendrion
4.4 %
Corbion
4.3 %
Intertrust
Total
57.8 %

Sector allocation (2021-02-28)

21.3 %
Industrial Goods & Services
14.6 %
Technology
10.3 %
Food & Beverage
9.6 %
Personal & Household Goods
9.4 %
Construction & Materials
9.0 %
Oil & Gas
7.6 %
Financial Services
5.0 %
Insurance
3.5 %
Retail
3.2 %
Telecommunications
2.1 %
Travel & Leisure
1.4 %
Health Care
3.0 %
Other
Total
100 %
Kempen Capital Management N.V. (KCM) is the management company of Kempen Orange Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

 

SWING FACTORS

An overview of the current swing factors are available here.

Ongoing charges

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Management fee i
0.750 %
Service fee i
0.25 %
Expected ongoing charges i
1.00 %
Ongoing charges last financial year i
1.00 %
The Ongoing Charges Figure of the last financial year relates to 2019.

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%
Kempen Capital Management N.V. (KCM) is the management company of Kempen Orange Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document (available in Dutch and English) and the prospectus (available in English). These documents are available on the website of KCM (www.kempen.com/en/asset-management). The information on the website is (partly) available in Dutch and English. 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
GPR Dutch Small Cap Index (dividends reinvested)
Investment category
Small-caps
Universum
Dutch and Belgian Small- and Mid-caps
Inception date
1990-09-07
Domicile
The Netherlands
May be offered to all investors in
The Netherlands
UCITS status i
No
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Management company
Kempen Capital Management N.V.
Depositary and custodian
BNP Paribas Securities Services S.C.A.
Morningstar rating â„¢
Morningstar Analyst rating
Silver

Tradability

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Listed
yes, listed on the NAV Trading Facility of Euronext
Subscription/Redemption Frequency
daily
ISIN i
NL0000289627
Kempen Capital Management N.V. (KCM) is the management company of Kempen Orange Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

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

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.

Our fund approach to responsible investment

Kempen’s ESG policy is fully implemented in our fund’s investment process across the three relevant pillars of: Exclusion, ESG integration and Active ownership

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The Kempen Orange Fund (KOF) N.V. invests in smaller and medium-sized Dutch companies that are included in the GPR Dutch Small Cap Index. The fund can also invest in Dutch and Belgian companies which are not included in the Index, provided that their market capitalisation is less than €5 billion at the time of purchase. KOF positions itself as a long-term engaged shareholder. We engage with our investee companies on a regular basis. These engagements include, but are certainly not limited to, our voting instructions at the company’s AGM. We always vote the shares of investee companies and if necessary attend annual meetings to stress our discussion points to management, potentially in collaboration with other stakeholders.

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The figure 'ESG integration in the investment process' is a step-by-step illustration of how Kempen’s ESG policy is integrated in the fund’s investment process.

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1. Exclusion

The fund excludes investment in entities involved in the production tobacco and of controversial weapons, such as cluster munitions, anti-personnel mines, nuclear warheads, chemical and biological weapons.

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2. ESG integration

In the fundamental analysis phase, we dive deeper into the ESG characteristics of a company. During the process we focus on each company on a case by case basis looking at the material risks in that specific industry and the firm’s exposure, practices and disclosure. In this phase we use various data sources, including MSCI ESG Research and Sustainalytics. If our opinion deviates from the external ESG research providers we explain why. Furthermore we look into the company’s exposure to controversies and opportunities which could reduce or increase our ESG score. Based on the above analysis we form an opinion on the quality of a company’s ESG profile and give each company a score (1-5). A lower score would require a higher upside potential to be included in the portfolio.

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3. Active ownership

As active long-term investors we perform comprehensive engagements with our portfolio companies. We strongly believe that our level of engagement with our portfolio companies is much deeper compared to our competitors. We frequently speak with the management teams of our portfolio companies. Each controversial item, as well as every individual engagement, is well-documented. We monitor the progress the company is making and continue to use our influence to create positive change.

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Exercising our voting rights is also an essential part of our responsible investment philosophy. We are actively engaging with our portfolio companies and make remarks on the agenda of annual and extraordinary meetings. We often attend annual meetings in person to stress our discussion points towards management, sometimes in collaboration with other stakeholders.

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Kempen’s ESG Team also performs a quarterly screen on our portfolio and may propose engagement with low ESG performers. The results of this screening are discussed in a separate meeting and an action list is created based on the outcomes of this meeting.

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.

ESG Report
Screening MSCI ESG research
Screening MSCI ESG research
UN global impact
Carbon intensity
ESG integration in the investement process
ESG integration in the investement process
Bron EN
Source
disclaimer
Kempen Capital Management N.V. (KCM) is the management company of Kempen Orange Fund N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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