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 2019-12-31 (rebased)

No chart data available

Performance per 2019-12-31

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  Fund Benchmark
1 month 3.7 % 3.4 %
3 months 9.7 % 11.7 %
This year 34.7 % 37.8 %
2016 8.5 % 7.5 %
2017 28.7 % 28.7 %
2018 -20.0 % -17.8 %
1 year (on annual basis) 34.7 % 37.8 %
3 years (on annual basis) i 11.5 % 13.4 %
5 years (on annual basis) i 13.8 % 15.0 %
Since inception (on annual basis) i 11.2 % 9.3 %
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 138.23 M 2019-12-31
Share class size
EUR 138.23 M 2019-12-31
Number of shares
1,414,984 2019-12-31
Net Asset Value i
EUR 99.25 2020-01-24
Transaction price i
EUR 99.05 2020-01-24
Morningstar rating â„¢
Morningstar Analyst rating
Silver

Fund characteristics per 2019-12-31

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  Fund Benchmark
Number of holdings 25 60
Dividend yield i 3.58 % 2.76 %
Weighted average market capitalization i EUR 2,388 M EUR 2,582 M
P/E ratio i 17.17 18.58
Active share i 35.71 %
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.

Market developments per 2019-12-31

At a return of 3.7% in December, KOF outperformed the GPR Dutch Small Cap Index, which climbed by 3.4%. A return of 34.7% over 2019 as a whole means that KOF underperformed by 3.1% versus this benchmark. KOF has earned an average annual return of 11.5% over the past three years.

The UK general election results and signs that the US and China are close to reaching a trade agreement created a positive mood on the global equity markets. In its monthly update, the FED confirmed its intention not to raise interest rates in 2020. In her first meeting as ECB president, Lagarde also said that interest rates would remain unchanged for the time being, given that inflation is currently about 1% below the ECB’s target of 2%. Germany’s IFO index exceeded expectations in December (96.3 versus a forecast of 95.5), a further recovery from the dip in the summer. Although confidence is at a relatively low level, the recent rise means the risk of a recession in Germany has reduced.

Portfolio developments per 2019-12-31

KOF invests 100% of the fund in the Benelux and therefore does not own UK stocks. However, the portfolio includes companies with a global footprint and is therefore exposed to the UK. The companies in the KOF portfolio with meaningful UK exposure include Arcadis, Forfarmers, Aalberts and VolkerWessels. As the majority shareholder in the latter name issued a take-over offer for the remaining shares the downside risk in VolkerWessels is negligible. We believe both ForFarmers and Arcadis are in a position to benefit from the Brexit as the UK is likely to become less dependent on imported meat which is positive for ForFamers. Arcadis may benefit from infra stimulus programs as part of a program to fuel economic growth. Aalberts is a very diversified company, both in terms of geographies and activities and we estimate the overall UK exposure to be low.

The largest increases to positions in the portfolio in December were in Fugro, Signify and Sligro. The combination of a better-than-expected trading update over the third quarter, a recent positive meeting with the management team and the fact that we believe the financial markets to be too negative about the company’s options for refinancing its debt are the main reasons for expanding the position in Fugro. Now that the main internal projects have been completed at Sligro, its management can revert to focusing fully on the business, resulting in better execution. This, combined with the absence of one-off expenses and positive earnings deriving from new initiatives, will form the first step towards restoring margins. The largest sales from the portfolio were ASMI and Aalberts. The increased share price and the risk of too optimistic growth forecasts for the second half of the year are the main reasons for reducing our position in Aalberts.

As a result of the (unexpected) termination of a joint venture with CGG, Fugro received not only the 40% interest in the joint venture from CGG but also a payment of USD35 million. This has reduced Fugro’s debt level and allayed doubts about the refinancing of two convertible bonds in 2021 and 2024. Fugro had previously earmarked the Seabed operations as ‘non-core business’. Now that Fugro is sole owner again it will be possible to sell these more quickly. We view the debt reduction and easier sale of Seabed as positive, as in doing so the company is creating an additional financial buffer in order to bridge a period of persistently low and/or volatile profitability without balance sheet difficulties. A recent recovery in the prices of the two convertible bonds confirms that fixed income investors share our opinion. Yet many shareholders still see pitfalls ahead given the 17% short position (source: www.shortsell.nl) that makes the Fugro shares the largest relative short position in the Netherlands. We further expanded our position in Fugro in December.

As in previous months, in December we again slimmed down our position in ASMI.In the wake of the 177% price hike over 2019, the company’s market value has grown too large for the GPR Dutch Small Cap index we use. In spite of the fact that the market outlook for ASMI is positive for the next few quarters, partly thanks to the strong upturn in orders, we believe the equity valuation has become rich.

Arcadis announced in December that it would no longer provide financial guarantees for ALEN, the Brazilian joint venture for clean energy, and was taking its losses. This operation had previously been earmarked as a non-core business and preparations for its sale were already well under way. Arcadis had decided in 2017 to invest more in this entity, of which it holds 50% minus one share, with the aim of preparing it for sale at a later date. However, Arcadis faced setbacks in making the facilities operational, leading to the project remaining loss-making for a lot longer than expected and requiring a higher amount of investment. During the divestment process it became clear that its current performance was below forecast, the number of genuinely interested parties was smaller than anticipated and the offers were both lower than expected and included a high number of supplementary conditions. Although it is negative that previously issued guarantees of up to €85 million may now have to be paid, this decision brings an uncertain chapter to a close and Arcadis can now focus all its attention on its core business. This step improves Arcadis’ risk profile and enables its management to concentrate on further restoring its core business, which we see as positive.
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 2019-12-31 (rebased)

No chart data available

Performance per 2019-12-31

Slide to see more
  Fund Benchmark
1 month 3.7 % 3.4 %
3 months 9.7 % 11.7 %
This year 34.7 % 37.8 %
2016 8.5 % 7.5 %
2017 28.7 % 28.7 %
2018 -20.0 % -17.8 %
1 year (on annual basis) 34.7 % 37.8 %
3 years (on annual basis) i 11.5 % 13.4 %
5 years (on annual basis) i 13.8 % 15.0 %
Since inception (on annual basis) i 11.2 % 9.3 %
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 3.80
Ex-date last dividend
2019-05-20
Number of distributions per year
1
Dividend calendar

Risk analysis (ex post) per 2019-12-31

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  3 years Since inception
Maximum drawdown i -21.46 % -59.19 %
Tracking error i 2.96 % 5.71 %
Information ratio i -0.64 0.33
Beta i 1.00 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 (2019-12-31)

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  Contribution i Performance i
Arcadis 0.76 % 12.57 %
SBM Offshore 0.72 % 8.45 %
Fugro 0.33 % 16.43 %
Boskalis Westminster 0.29 % 7.50 %
TKH Group 0.22 % 6.07 %

Bottom 5 contribution (2019-12-31)

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  Contribution i Performance i
ASR Nederland -0.04 % -1.12 %
ASM International -0.00 % -0.71 %
Accell -0.00 % -0.61 %
Koninklijke Volkerwessels 0.00 % 0.00 %
Corbion 0.00 % 0.14 %

Geographic allocation (2019-12-31)

95.0 %
Netherlands
2.1 %
Belgium
2.8 %
Cash
Total
100 %

Top 10 holdings (2019-12-31)

9.1 %
SBM Offshore
7.0 %
BE Semiconductor Industries
6.7 %
Arcadis
6.0 %
IMCD
4.9 %
Intertrust
4.8 %
ASM International
4.6 %
Signify
4.1 %
Amsterdam Commodities
4.0 %
Boskalis Westminster
4.0 %
TKH Group
Total
55.4 %

Sector allocation (2019-12-31)

15.8 %
Technology
12.5 %
Financial Services
12.1 %
Construction & Materials
12.0 %
Industrial Goods & Services
11.7 %
Oil & Gas
10.9 %
Food & Beverage
10.7 %
Personal & Household Goods
6.2 %
Retail
3.2 %
Insurance
2.1 %
Health Care
2.8 %
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.

Ongoing charges

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Management fee i
0.75 %
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 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%

Other costs

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Upward swing factor i
0.20 %
Downward swing factor i
0.20 %
As of 14 January 2019 the swing factor has been adjusted from 0.25%/0.25% to 0.20%/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 research
Screening MSCI research
UN
Carbon intensity
ESG integration in the investement process
ESG integration in the investement process
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.