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 2022-10-31 (rebased)

No chart data available

Performance per 2022-10-31

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  Fund Benchmark
1 month 6.0 % 7.4 %
3 months -8.3 % -4.3 %
This year -18.0 % -11.2 %
2019 34.7 % 37.8 %
2020 15.2 % 14.6 %
2021 29.2 % 29.4 %
1 year (on annual basis) -13.3 % -8.0 %
3 years (on annual basis) i 9.6 % 12.9 %
5 years (on annual basis) i 5.5 % 8.3 %
Since inception (on annual basis) i 10.8 % 9.4 %
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 144.15 M 2022-10-31
Share class size
EUR 144.15 M 2022-10-31
Number of shares
1,297,102 2022-10-31
Net Asset Value i
EUR 120.67 2022-12-02
Transaction price i
EUR 121.03 2022-12-02
Morningstar rating â„¢
Morningstar Analyst rating
Gold

Fund characteristics per 2022-10-31

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  Fund Benchmark
Number of holdings 22 56
Dividend yield i 4.25 % 4.66 %
Weighted average market capitalization i EUR 2,706 M EUR 3,173 M
P/E ratio i 11.12
Active share i 40.22 %
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 2022-10-31

KOF earned a positive return of 6.0% in October, while the GPR Dutch Small Cap index climbed by 7.4%. In the first ten months of this year, KOF’s Net Asset Value (NAV) decreased by 18.0% versus a downturn of 11.2% for the benchmark.

October was the best month of the year so far for both KOF and the benchmark. Further confirmation of slowing economic growth and the decline in energy and commodity prices overshadowed concerns about the persistently high rate of inflation somewhat. At the same time, the unusually mild autumn weather in large parts of Europe along with full gas reserves caused the gas price to drop sharply, marginally easing the pressure on corporate profits and consumer budgets. Finally, the slowdown in global growth is leading to a decrease in logistics costs. The improved availability of components is enabling companies to bring their historically high order books back down to normal levels. As a result, businesses realised sound utilisation rates and combined with lower energy and transport costs this shored up corporate results reasonably well in the third quarter. Nevertheless, forecasts for the coming quarters in particular are now being adjusted downwards due to a lack of new orders as existing stocks in the sales channel need to be used up first. Suppliers to the semiconductor industry on the one hand face a drop in demand in the short term because of restrictions imposed in China, while on the other companies will relocate in order to meet the continued strong demand in the medium and long term. At this time of uncertainty, our focus continues to be on companies that occupy a robust position in the value chain, enjoy sound balance sheets and have a strong management team, enabling them to concentrate fully on further consolidating their market position.

The largest increases to the KOF portfolio in October were to Sligro, BESI and Basic-Fit. The biggest sales were of ASR, Arcadis and Telenet. Other positions were adjusted based on changes to the model portfolio driven by valuations and upward price potential.

ASR is one of KOF’s top-5 positions and at a total return of +16% over the past 10 months has this year succeeded in escaping the negative sentiment on the global equity markets. The insurer is profiting not only from the higher interest rates on the capital market but also from its strong track record deriving from its 100% focus on the Netherlands and rigorously managed operations. In this context, an acquisition opportunity with a double-digit return on the invested capital more than justifies the positive price reaction to its planned acquisition of Aegon’s Dutch activities. The expected cost synergies of €185 million are a conservative estimate and we believe there is a high probability of this amount being raised in the long term, as in previous acquisitions. The snap issue of 10% new shares and placement of a 30% interest in Aegon mean that ASR’s balance sheet remains solid and smaller transactions (e.g. in brokers) continue to be an option. We see it as positive that CEO Jos Baeten will stay until 2026 and in doing so oversee the entire integration process. It is rare for us to make (almost) no critical comments about a transaction, but ASR appears to have succeeded in this once again.

Basic-Fit so far seems to be the loser in the showdown with the financial markets on presentation of the trading update over the third quarter. The downward adjustments to targets relating to the forecast results, expected growth in the number of new members and number of new clubs to be opened in 2022 came not only relatively late in the year but also after reassuring remarks from management on market trends and the impact of (cost-push) inflation on presentation of the interim results. Although Basic-Fit is viewed as a well-oiled machine in terms of conquering Europe with its value for money fitness proposition, its engine has seemed to stall recently, with an impact on both earnings forecasts and the valuation multiple leading to exaggerated price results. The fact that about 50 new clubs will only open in early 2023 rather than at the end of 2022 only serves to fan the flames for short sellers and supposedly points to an excessively tight cash position at the company. As of the end of the quarter, Basic-Fit held a substantial cash position of €174 million and forecasts a positive operational cashflow from the second half of 2023. This seems to prove that the market’s concerns about its cash position are unfounded. We are in favour of the company raising its membership fees for (cost-push) inflation so that it can revert to earning the original returns on its mature clubs more quickly. As Basic-Fit will still be the cheapest option even after raising its fees, we think this will only have a minor impact on the number of members. It is well known that financial markets value predictability and consistent policies and postponing club openings is not aligned with these qualities.

Signify reported relatively sound results over the third quarter but its lower targets over 2022 are an implicit admission that it expects this trend to be bucked in the fourth quarter. The negative repercussions of the lockdowns in China, the absence of revenue in the horticultural segment due to the high energy prices and the sharp drop in consumer confidence are the main reasons for caution in the short term. In the long term, however, we view Signify as one of the winners in the energy transition, with the time for recouping the cost of switching from traditional lighting to LED in fact being reduced substantially. At a return on Signify’s free cashflow of in excess of 15% over the next three years, the financial markets seem to be classing short-term challenges as structural, which is too negative in our opinion.

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 2022-10-31 (rebased)

No chart data available

Performance per 2022-10-31

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  Fund Benchmark
1 month 6.0 % 7.4 %
3 months -8.3 % -4.3 %
This year -18.0 % -11.2 %
2019 34.7 % 37.8 %
2020 15.2 % 14.6 %
2021 29.2 % 29.4 %
1 year (on annual basis) -13.3 % -8.0 %
3 years (on annual basis) i 9.6 % 12.9 %
5 years (on annual basis) i 5.5 % 8.3 %
Since inception (on annual basis) i 10.8 % 9.4 %
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 3.00
Ex-date last dividend
2022-05-27
Number of distributions per year
1
Dividend calendar

Risk analysis (ex post) per 2022-10-31

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  3 years Since inception
Maximum drawdown i -25.65 % -36.47 %
Tracking error i 5.35 % 5.69 %
Information ratio i -0.63 0.25
Beta i 0.87 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.

Maturity profile (2022-10-31)

3.3 %
Cash
96.7 %
Other
Total
100 %

Geographic allocation (2022-10-31)

91.8 %
Netherlands
4.9 %
Belgium
3.3 %
Cash
Total
100 %

Top 10 holdings (2022-10-31)

9.8 %
ASR Nederland
8.5 %
Signify
8.3 %
SBM Offshore
7.5 %
Aalberts
6.9 %
BE Semiconductor Industries
5.9 %
Corbion
5.0 %
Sligro Food Group
4.8 %
TKH Group
4.7 %
Arcadis
4.6 %
Ordina
Total
66.0 %

Rating allocation (2022-10-31)

96.7 %
Not Rated
3.3 %
Cash
Total
100 %

Sector allocation (2022-10-31)

30.2 %
Industrials
18.7 %
Technology
14.2 %
Financials
11.7 %
Consumer Discretionary
8.3 %
Energy
5.9 %
Basic Materials
4.3 %
Consumer Staples
3.3 %
Other
1.8 %
Telecommunications
1.6 %
Health Care
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.

Environmental and/or social characteristics promoted

The Kempen Orange Fund (the “Fund”) falls under the scope of article 8 of the SFDR which means that the fund promotes environmental and/or social characteristics. This fund will invest in a broad range of companies, of which some will have sustainability objectives.

We commit to the goals of the Paris Agreement. This encompasses short-term objectives (2025), a mid-term ambition (2030) and a long-term commitment to be a net zero investor by 2050. By 2025, we aim to be aligned with a path to achieving the Paris Agreement and Dutch Klimaatakkoord. We follow the market reduction, which assumes a pathway in line with the EU Benchmarks.

Fund carbon emission targets

ESG Investment process

The promotion of environmental and/or social characteristics is achieved through the consistent implementation of the funds ESG policy. The ESG policy is fully implemented in our strategy’s investment process across the three relevant pillars of: Exclusion, ESG integration and Active ownership.

In the investment process we assess the ESG profile of a company. We look at each company on a case-by-case basis, taking into account material risks in a given industry in combination with the company’s respective risk exposure, practices and disclosure. This includes an assessment of good governance practices. The investee companies are rated for governance aspects using external research as well as making internal assessments. Furthermore, we look into the company’s exposure to past controversies and future ESG opportunities. Based on the fundamental ESG analysis we form an opinion on the quality of a company’s ESG profile.

Exclusion

The Fund excludes companies through the application of strict exclusion criteria. These take into account international standards, such as UN Global Compact Framework, the OECD Guidelines for Multinational Enterprises, UN Guiding Principles for Business and Human Rights, and our Principles for Responsible Investment commitments. We have summarized how we integrated the principle adverse indicators in our ESG policy and process in the ESG Policy & Process document that can be found on our website.

Key figures

  Kempen criteria Additional criteria
Business conduct
Human Rights
Labour
Environment
Anti Corruption
Product involvement
Controversial Weapons
Tobacco
Thermal Coal
Tar Sands
Adult Entertainment
Alcohol
Animal Welfare & GMO
Gambling
Power Generation Nuclear
Power Generation Carbon Intensive
(Un)conventional Oil & Gas Extraction
Weaponry
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 2021.

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
Universe
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
Administrator
BNP Paribas S.A., Netherlands Branch
Management company
Kempen Capital Management N.V.
Depositary and custodian
BNP Paribas S.A., Netherlands Branch
Morningstar rating â„¢
Morningstar Analyst rating
Gold

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.