- Kempen
- Kempen Orange Participaties NV
Kempen Oranje Participaties NV
Profile
KOP positions itself as an engaged shareholder and aims to generate a long term total return of 10% on an annual basis (on the basis of capital gains and dividends).
Management team
Performance per 2021-03-31 (rebased)
Performance per 2021-03-31
Fund | |
---|---|
1 month | 5.7 % |
3 months | 12.6 % |
This year | 12.6 % |
2018 | -21.1 % |
2019 | 27.6 % |
2020 | 19.0 % |
1 year (on annual basis) | 71.8 % |
3 years (on annual basis) i | 11.0 % |
5 years (on annual basis) i | 19.1 % |
Since inception (on annual basis) i | 13.7 % |
Key figures
Total fund size | EUR 1,003.77 M 2021-03-31 |
Share class size | EUR 1,003.77 M 2021-03-31 |
Number of shares | 3,651,439 2021-03-31 |
Net Asset Value i | EUR 284.72 2021-04-16 |
Transaction price i | EUR 276.27 2021-04-01 |
Morningstar rating â„¢ | |
Fund characteristics per 2021-03-31
Fund | ||
---|---|---|
Number of holdings | 25 | |
Dividend yield i | 1.07 % | |
Weighted average market capitalization i | EUR 1,298 M | |
P/E ratio i | 20.33 |
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 2021-03-31
Performance
In the first quarter of 2021, KOP’s Net Asset Value (NAV) increased from €244.14 to €274.90 per share, which translates into a return of +12.6%. KOP has averaged a total return of +11.0% per year over the past three years and +19.1% per year over the past five years, resulting in a performance above our target of an average of 10% per year in the long term.
Trading
On 1 April 2021, the trading price was €276.26, based on the NAV of that date plus a premium of 0.5% caused by net inflow into the fund. As of the start of the second quarter, the fund’s size had surpassed the milestone of €1 billion. For the next trading date of 1 July 2021, an instruction deadline of 4pm on 31 May 2021 applies for orders in KOP (via Euronext) and a few days before that for the holding companies (via the Van Lanschot Kempen transfer agent).
Market view
Equity markets got off to a positive start this year thanks to a combination of an upturn in the global economy, persisting low interest rates and relative political tranquillity. The UK and US are leading the way on easing lockdowns, with the Biden administration’s enormous US$2,000 billion investment programme expected to boost the economic recovery further over the next few months. China is also displaying clear economic growth, partly thanks to the almost total absence of new Coronavirus cases. The recovery is occurring more slowly in continental Europe due to the ongoing lockdowns caused by the slow start to the vaccination programmes. The financial markets are anticipating (temporarily) higher inflation, which should lead to equity markets performing relatively well versus bond markets. The MSCI World Index was up by 7.0% in the first quarter of 2021 and the MSCI European small cap index by 9.1%.
Portfolio
KOP started the year well with a double-digit return over the first quarter. The companies in the portfolio have published their annual results over the past couple of months and these were generally good. One interesting phenomenon in the results of the companies in our portfolio as well as others is the exceedingly strong cash generation in 2020. In addition to limited capital investments throughout the year, businesses had generally greatly reduced their working capital by the end of the year, leading to high cashflows and a boost to their year-end balance sheets. For instance, the two portfolio companies with the highest debt ratios, Kendrion and SAF Holland, reported acceptable debt ratios of 2.3 and 2.6 respectively versus their operational cashflows.
Another clear trend is the persisting enthusiasm among investors for the semiconductor industry. The equity prices of major companies such as ASML, Applied Materials and TSMC reached new all-time highs in the first quarter, as did our semiconductor players BESI and Suss Microtec.
BESI (+44%) published robust fourth-quarter results, with the company forecasting a revenue increase of 30-40% in the first quarter of 2021 compared to the fourth quarter of 2020, combined with persisting high profit margins. In the first week of April, BESI also announced that its order intake grew by as much as 176% in the first quarter of 2021, which will further boost its results in the short term. The recently announced alliance with Applied Materials seems to have got off to a flying start. Moreover, the excellent outlook for machine manufacturers like BESI was confirmed by announcements of major investment programmes by clients such as Intel and TSMC.
Suss Microtec (+41%) also noted in a press release that its order intake grew at a higher-than-expected rate after it increased by over 10% in the first quarter versus last year. In addition, the company announced the appointment of a new CEO and new COO, both of whom will take up their posts in May. The two managers have many years of experience and excellent track records in improving operational efficiency at businesses, something Suss Microtec sorely needs.
Important news came from Lectra (+13%), which announced the acquisition of its biggest competitor Gerber in February. While Lectra is primarily successful in the automotive and European fashion markets, Gerber occupies a strong position in the US fashion market and in terms of software is ten times larger than Lectra in the US. Under the management by its private equity owner, Gerber has undergone a remarkable transformation in the past few years that has led to a sharp improvement in profitability and product innovation. This €295 million acquisition (in cash and new Lectra shares) will increase Lectra’s revenue by 70% and we expect the merger of the two companies plus the economic recovery to push up Lectra’s operating profits from €25 million in 2020 to nearly €70 million in 2022. The acquisition of Gerber will also enable Lectra to have its machines manufactured by external parties in future (including at the Chinese facility owned by Dutch company VDL).
In addition to BESI and Suss Microtec, other strong climbers across the quarter included Kendrion (+32%) and our Italian names La Doria (+32%) and El.En (+32%). Kendrion’s equity price rallied after lagging behind in relative terms last year, partly aided by the strong results from its industrial operations in particular and the improvement in its balance sheet prompted by the sound cashflows mentioned earlier. The company views the future with great confidence and identifies growth opportunities in areas such as the automation of logistics, robotics and wind energy. In order to keep up with the growth in demand, Kendrion has decided to substantially expand its production capacity in China.
La Doria’s results demonstrate the expected positive effect of the lockdowns caused by the COVID-19 crisis. Consumption of preserved Italian foodstuffs soared last year and La Doria noted a revenue increase of 18% in 2020. Following a normalisation of demand in 2021, the company anticipates further growth in the years to follow. Profitability in particular should move to a structurally higher level as a result of the increased scale, benefits deriving from the investment programme and new customers for the most profitable pasta sauce activities. La Doria has therefore raised its dividend, bringing the dividend yield to 3.4%. El.En reported a surprisingly robust recovery in revenue in the second half of the year after its factories in Wuhan and northern Italy were hit hard by the COVID-19 crisis last year. Its Chinese industrial operations are displaying especially sharp growth, but the medical laser activities are also profiting from an upturn in demand combined with successful innovations (new machines for hair removal, breaking down kidney stones, body fat treatments). El.En forecasts double-digit earnings growth for 2021, driven by growth in both these divisions.
We witnessed relatively weak equity price growth at Acomo (+2%), DiscoverIE (+1%) and Coats (-11%), with DiscoverIE reporting sound results but its shares mainly having to compete with last year’s strong price performance. COVID-19 squeezed Acomo’s results last year (operating profit -4%) due to lower prices for traded goods such as tea and pepper, as well as higher logistics costs. Furthermore, the company incurred one-off expenses for the acquisition of Tradin. The equity price of Coats continues to trail the general equity market just as it did last year. There is ongoing pressure on global clothing sales, with trends such as digitisation, sustainability and the transfer of clothing manufacture to countries outside China continuing. Coats is well-positioned in this respect and its activities in Vietnam in particular are displaying growth. Its results contained lower-than-expected revenue from specialist threads for e.g. the oil and gas industries and industrial and military protective clothing, while products for the automotive industry performed relatively well. Coats will make additional payments into its pension fund over the next two years, after which the free cashflow for shareholders will rise again.
After selling two entire participations (Oeneo and Sligro) and adding three new participations (DiscoverIE, AlliancePharma and Momentum Group) last year, in the first quarter of 2021 we were again able to announce a new participation, namely in the UK’s SThree Plc. This brings the total number of participations to 18, within our target range of 15-20.
SThree is the world’s largest international staffing company in what are known as STEM markets (Science, Technology, Engineering, Mathematics). The company recruits specialist permanent or contract staff on behalf of clients for projects in the fields of e.g. IT infrastructure, cloud and cybersecurity. SThree has offices in Europe, North America and Asia, under brands such as Computer Futures, Huxley and Progressive (www.progressiverecruitment.com/nl-nl/). The company supplies technical experts to clients in a wide range of sectors, including IT, financial institutions, medical and food technology, engineering and (renewable) energy.
The ongoing global digital transition means that demand will grow for personnel in STEM markets and SThree also anticipates increasing its market share by 50% over the next four years. The company likewise expects to be able to increase its profit margins and free cashflows through improved use of its scale.
We have monitored SThree for many years and are impressed by its operational performance and strategic progress. It is our belief that SThree offers us interesting growth characteristics at an attractive valuation of 15 times its 2022 operating profits. As of the end of the first quarter, the participation in SThree represented about 4% of the KOP portfolio.
As usual, we have a number of new participations under construction, in relation to which we are keen not to disturb share prices in case of limited liquidity in their shares. We hope to be able to announce new participations in the coming quarters. If the next few quarters see an increase in price volatility on the markets, we will be able to use our substantial cash position in order to create further value in the KOP portfolio.
Valuations
The value of the KOP portfolio increased across the quarter. The portfolio’s cash-adjusted price/earnings ratio (EV/EBIT 2022E) stands at 15. This is high from a historic perspective but given the persisting low interest rates we continue to believe that our portfolio enjoys long-term price potential.
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 2021-03-31 (rebased)
Performance per 2021-03-31
Fund | |
---|---|
1 month | 5.7 % |
3 months | 12.6 % |
This year | 12.6 % |
2018 | -21.1 % |
2019 | 27.6 % |
2020 | 19.0 % |
1 year (on annual basis) | 71.8 % |
3 years (on annual basis) i | 11.0 % |
5 years (on annual basis) i | 19.1 % |
Since inception (on annual basis) i | 13.7 % |
Dividends
Distributing | Yes |
Last dividend | EUR 3.80 |
Ex-date last dividend | 2020-06-05 |
Number of distributions per year | 1 |
Dividend calendar |
Risk analysis (ex post) per 2021-03-31
3 years | Since inception | |
---|---|---|
Maximum drawdown i | -23.08 % | -63.64 % |
Tracking error i | 10.00 % | 9.46 % |
Information ratio i | -0.46 | 0.24 |
Beta i | 0.77 | 0.84 |
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.
Geographic allocation (2021-03-31)
Sector allocation (2021-03-31)
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
Management fee i | 0.750 % |
Service fee i | 0.20 % |
Expected ongoing charges i | 0.95% |
Ongoing charges last financial year i | 0.95 % |
Other costs
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
Investor type | Institutional & Private |
Distributing | Yes |
Objective | To generate a long term return of 10% a year (on the basis of capital gains and dividends) |
Investment category | Small-caps |
Universum | European small-caps |
Inception date | 1985-08-29 |
Domicile | The Netherlands |
May be offered to all investors in | The Netherlands |
May be offered to professional investors only in | United Kingdom |
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„¢ | |
Tradability
Listed | yes, listed on the NAV Trading Facility of Euronext |
Subscription/Redemption Frequency | Quarterly, on the first business day of January, April, July en October |
ISIN i | NL0000440675 |
Entry period purchase order | Approximately 32 calendar days before the start of each quarter |
Entry period sell order | Approximately 32 calendar days before the start of each quarter |
Details | Orders must be sent by the bank or broker to the NYSE Euronext Trading Facility on the last business day of November, February, May and August, no later than 04.00 PM Amsterdam time in order to be executed on the next dealing day. |
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.
Due to the nature of this fund, this information is only available on the Dutch part of this website in the Dutch language.
Read more information about Kempen Capital Management NV on this site and find also more information on BNP Paribas Securities Services S.C.A.
Factsheets
Key Investor Information
Sustainability related disclosures
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.
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Kempen wide approach to responsible investment
We are committed to create sustainable alpha. The four pillars of our ESG-policy are:
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ESG integration: Ensuring sustainability risks and opportunities are adequately considered in our investment analysis and processes.
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Exclusion & avoidance: Not investing in companies involved in controversial activities or conduct.
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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
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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.
Climate change
As a long-term investor, we believe climate change represents a systemic risk facing the economy, society and environment. We want to consider the risks and opportunities this presents to our investments in the coming decades. We have therefore set a long-term commitment (2050), a mid-term ambition (2030) and short-term objectives (2025).
- Â Â Â 2050 commitment: Net-zero investor.
- Â Â Â 2030 ambition: To align with a Paris Agreement pathway (listed and non-listed investments) and Dutch Klimaatakkoord.
- Â Â Â 2025 objectives: To align with a pathway towards achieving the Paris Agreement (listed investments) and Dutch Klimaatakkoord goals.[1]
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The Kempen climate change policy can be found here (under climate change policy).
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[1]We use carbon intensity as a metric to come to the pathway of net-zero emissions. As we care about the direction of travel and reduction of carbon emissions in the economy, it might be that the actual reducing trend may deviate from the suggested average trend line. The pathway is derived from the pathway of the EU Benchmarks.
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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Kempen Oranje Participaties N.V. (KOP) offers the opportunity to invest in small-sized European companies. KOP invests in shares of undervalued companies and aims to hold 5% or more of the paid up nominal capital of each company. KOP positions itself as a long-term engaged shareholder. We typically engage with our investee companies on a regular basis. The close relationships with investee companies in combination with our ownership level in each company enable us to influence the agenda of the annual meetings. Furthermore, we always vote and comment on annual meetings.
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The figure 'ESG-integration in the investment process' is a step-by-step representation of how Kempen’s ESG policy is integrated into the investment process.
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1.Exclusion
KOP 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. In addition, we exclude pure coal players and pure players involved in tar sands, as these activities have an adverse impact on climate change. We use MSCI ESG Research data to automatically screen and remove companies from our universe.
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The next step in our process, the ‘Quick Scan’ phase, helps us to avoid companies that do not meet our sustainability screening criteria based on their activities and conduct. We apply a checklist to screen each company using MSCI ESG Research and Sustainalytics data.
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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 and opportunities in that specific industry, the firm’s exposure, as well as practices and disclosure. In this phase we use various data sources, including MSCI ESG Research and Sustainalytics. 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). The scores are linked to our investment cases, where a lower score would require a higher upside potential.
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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 than that of 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 agendas of annual and extraordinary meetings. The fund’s close relationships with investee companies in combination with our ownership level in each company enable us to influence the agenda of the annual meetings. 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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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 Partiesâ€), 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





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.