Kempen Oranje Participaties N.V.

Profile

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 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

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

Performance per 2019-07-31 (rebased)

No chart data available

Performance per 2019-07-31

Slide to see more
  Fund
1 month -3.2 %
3 months -7.1 %
This year 10.3 %
2016 32.8 %
2017 42.3 %
2018 -21.1 %
1 year (on annual basis) -7.6 %
3 years (on annual basis) i 12.6 %
5 years (on annual basis) i 16.4 %
Since inception (on annual basis) i 12.7 %
As of 1 July 2015 the investment policy of Kempen Oranje Participaties N.V. has changed. In addition to Dutch and Belgian companies it is now also allowed to invest in other European companies. 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

Slide to see more
Total fund size
EUR 643.69 M 2019-07-31
Share class size
EUR 643.69 M 2019-07-31
Number of shares
3,564,355 2019-07-31
Net Asset Value i
EUR 176.59 2019-08-22
Transaction price i
EUR 187.42 2019-07-01
Morningstar rating â„¢

Fund characteristics per 2019-06-30

Slide to see more
  Fund
Number of holdings 20
Dividend yield i 3.36 %
Weighted average market capitalization i EUR 948 M
P/E ratio i 17.17
Kempen Capital Management NV (KCM) is the management company of Kempen Oranje Participaties N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

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

Market developments per 2019-06-30

The following texts refer to the second quarter of 2019.

Performance
In the second quarter of 2019, KOP’s Net Asset Value (NAV) increased from €184.98 to €186.48 per participation, translating into a return – including the paid dividend of €3.80 - of 3.0%. This brings the return over the first half of the year to 13.9%. In the wake of a sharp drop in the fourth quarter of 2018 and a robust recovery in the first quarter of 2019, KOP’s price experienced a calmer second quarter. On a monthly basis, however, we continue to see high volatility, in line with the uncertain sentiment on the market. Volatility is inextricably linked to investment in European small caps, and this is why our investment philosophy of being an engaged long-term shareholder in solid companies is enormously important. The return has averaged 16.6% per year over the past three years.

Trading
As of 1 July 2019, the trading price was €187.42, based on the NAV as of that date and including a premium of 0.5% as a result of net inflow into KOP. The number of issued shares in KOP increased by 1%, bringing the size of the fund to about €660 million. For the next trading date of 1 October 2019, an instruction deadline of 4pm on 31 August 2019 applies for orders in KOP (via Euronext) and a few days before that for the holding companies (via the Kempen transfer agent).

Market review
The MSCI Europe small cap index rose by 1.5% in the second quarter. Equity markets veered between the negative impact of weakening global economic growth (chiefly caused by the trade war between the US and China) and the driving effect of falling bond yields. This has led to tighter spreads and a persistently high number of mergers and acquisitions. After all, companies that are seeing their revenue growth slow and capital becoming cheaper are likely to make acquisitions in which private equity as a vendor often plays a major role. Moreover, companies are still redeeming shares en masse, which at least serves to maintain the growth per share. Jitters and accommodating monetary policies from central banks are pushing up the gold price, while the growing tensions between the US and Iran are causing oil prices to rise. This could lead to renewed cost-push inflation at companies and squeeze profitability, making acquisitions even more attractive as a potential new source of revenue growth and cost savings. This is chiefly visible in the energy, insurance and pharmaceutical sectors, as well as in the automotive industry where Fiat Chrysler and Renault attempted to improve their respective positions via a merger. Weak real economic growth and little need to invest in new capital goods mean that the surplus liquidity is finding its way into private equity and public equity (equity markets), which is keeping valuations for financial securities (equities, bonds and real estate) high.

Portfolio developments per 2019-06-30

In relation to the portfolio, no new participations were reported in the second quarter, although we do have a number under construction. As noted in previous reports, liquidity continues to be a challenge and previous profit warnings in the investment universe regularly remind us that we need to be highly selective about what we buy at times of (technological) disruption to businesses and industries. We continue to abide by our motto of “if in doubt, stay out”. As a result, from the outside it may look as if we are being passive, while we are in fact trying to do our homework as thoroughly as possible on potential new participations as well as existing ones.

News from our companies
The best-performing equity in the KOP portfolio is Interroll, which has noted a price hike of 70% this year and was up 21% in the second quarter. Clear prospects of high multi-year growth remain scarce in a world of declining economic growth. In contrast, Interroll is displaying robust growth, driven by the persistently strong demand for logistics systems for automating distribution centres. In June, for instance, Interroll netted a follow-up order from a Korean e-commerce customer for a logistics solution with a total length of nearly 12 kilometres.

Another strong performer is BESI, which has seen its equity price rise by 28% this year. We have held our largest participation in the portfolio for years but had reduced it substantially in 2017 when prices reached high levels, building it up again at lower levels in the second half of 2018. This equity is enormously volatile, which offers us opportunities but also means it can have a considerable impact on KOP’s price in the short term. The BESI equity reached a high of €28 on 25 April 2019, for example, only to drop back to €20 on 3 June and then rise again to nearly €23 at the end of the quarter. A major reason for this price volatility is the persisting uncertainty surrounding the trade war between the US and China. The semiconductor industry has a highly international structure, with the technology and production equipment largely being developed in the US (and to a lesser extent Europe) and the end products being manufactured in the Far East and then shipped to consumers around the world. The political skirmishing relates not just to trade flows but also to this transfer of technology. We believe that BESI is in an excellent position to retain its market leadership and perhaps even improve it in all scenarios, partly aided by the exceedingly efficient cooperation between its factories in China and Malaysia and recent product innovations.

The equity price of Forfarmers continues to be squeezed due to the uncertainty surrounding the impact on profitability in 2019 of the acquisition of (excessively) expensive stocks in 2018. The first six months will be weak, with a recovery to normal profit levels expected in the course of the second half of the year. In addition to the temporary pressure on margins caused by the stocks, the debate on phosphate limits in the Netherlands and the outbreak of African Swine Fever in Asia are affecting the agricultural sector and Forfarmers this year.

El.En held a shareholder meeting at which the company mainly discussed new product innovations. In addition to the Ondamachine (fat removal, done manually by a doctor) launched last year, in Italy and Japan it has now introduced the B-Star machine, which works automatically and does not need to be operated by a doctor. Furthermore, El.En is working on a new machine aimed at the acne market. The new system removes acne completely, making it unique. Together with a number of other innovations, these machines will generate ongoing growth at El.En of about 10% per year, in line with the growth achieved in the past few years.

Coats organised its first sustainability event for shareholders in June. Since the financial crisis, Coats has increased its efforts to improve the ecological footprint of its operations. Firstly, it believes this to be perfectly possible and secondly, it is profiting from a widening gross margin. Since 2018, the company has enjoyed a clear additional advantage: customers are placing orders with Coats due to its leadership on sustainability. Coats believes it is about six years ahead of its competitors in the market. Its ambition is to make 85% of the threads and yarns it manufactures from recycled polyester. The company is working together with two of the five largest recyclers of plastic in the world to define the specifications for making thread out of it. At the moment, recycled polyester is about 6-7% more expensive than new polyester. Yet Coats charges its customers a price premium of 10%, thereby retaining a portion of its competitive advantage. In 2019, it is selling ten times the amount of recycled threads that it did in 2018, and the aim is to increase volumes by a further 14 times for 2020.

Valuations
On balance, the valuation of the KOP portfolio remained unchanged in the second quarter. The portfolio’s cash-adjusted price/earnings ratio (EV/EBIT 2019E) stands at 12. We believe that the portfolio’s long-term price potential continues to be interesting as a result of this.
Kempen Capital Management NV (KCM) is the management company of Kempen Oranje Participaties N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

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

Performance per 2019-07-31 (rebased)

No chart data available

Performance per 2019-07-31

Slide to see more
  Fund
1 month -3.2 %
3 months -7.1 %
This year 10.3 %
2016 32.8 %
2017 42.3 %
2018 -21.1 %
1 year (on annual basis) -7.6 %
3 years (on annual basis) i 12.6 %
5 years (on annual basis) i 16.4 %
Since inception (on annual basis) i 12.7 %
As of 1 July 2015 the investment policy of Kempen Oranje Participaties N.V. has changed. In addition to Dutch and Belgian companies it is now also allowed to invest in other European companies. 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

Slide to see more
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 2019-07-31

Slide to see more
  3 years Since inception
Maximum drawdown i -21.14 % -63.64 %
Tracking error i 8.67 % 9.42 %
Information ratio i -0.36 0.22
Beta i 0.93 0.85
Kempen Capital Management NV (KCM) is the management company of Kempen Oranje Participaties N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

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

Geographic allocation (2019-06-30)

35.4 %
Netherlands
14.6 %
United Kingdom
10.9 %
France
8.8 %
Luxembourg
8.0 %
Germany
7.0 %
Switzerland
6.1 %
Italy
2.2 %
Singapore
1.3 %
Norway
0.7 %
Ireland
4.9 %
Cash
Total
100 %

Top 5 holdings (2019-07-31)

17.1 %
BE Semiconductor Industries
10.5 %
Coats
7.0 %
Interroll
6.5 %
ForFarmers
6.0 %
Washtec
Total
47.1 %

Sector allocation (2019-06-30)

42.0 %
Industrial Goods & Services
22.3 %
Technology
19.9 %
Food & Beverage
4.7 %
Money Market Funds
4.0 %
Automobiles & Parts
1.5 %
Retail
0.7 %
Personal & Household Goods
4.9 %
Other
Total
100 %
Kempen Capital Management NV (KCM) is the management company of Kempen Oranje Participaties N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

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

Ongoing charges

Slide to see more
Management fee i
0.75 %
Service fee i
0.20 %
Expected ongoing charges i
0.95%
Ongoing charges last financial year i
0.95 %
The Ongoing Charges Figure of the last financial year relates to 2016.

Other costs

Slide to see more
Upward swing factor i
0.50 %
Downward swing factor i
1.50 %
Kempen Capital Management NV (KCM) is the management company of Kempen Oranje Participaties N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

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

Share class details

Slide to see more
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

Slide to see more
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.
Kempen Capital Management NV (KCM) is the management company of Kempen Oranje Participaties N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

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

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents are available on the website of KCM (www.kempen.com/investmentfunds). 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.

Â

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.

Â

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.

Â

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.

Â

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.

Â

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.

Â

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.

Â

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. We use MSCI ESG Research data to automatically screen and remove companies from our universe.

Â

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.

Â

2. ESG integration

In the fundamental analysis phase of the process, we dive deeper into the ESG characteristics of a company. During the process we look at each company on a case by case basis identifying the material risks in that industry and their 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 the ESG score.Based on the above analysis we form an opinion on the quality of a company’s ESG profile and give each firm a score (1-5). A lower score would require a higher upside potential to be included in the portfolio.

Â

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.

Â

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.

Â

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.

*

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 intenity
ESG integration in the investment process
ESG integration in the investment process
Source
disclaimer
Kempen Capital Management NV (KCM) is the management company of Kempen Oranje Participaties N.V. (the Fund). KCM is authorised as a management company and regulated by The Netherlands Authority for the Financial Markets. The Fund is registered under the license of KCM at the The Netherlands Authority for the Financial Markets.

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