Kempen Oranje Participaties NV

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. The environmental, social and governance (ESG) criteria are incorporated in the investment process.

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 2021-09-30 (rebased)

No chart data available

Performance per 2021-09-30

Slide to see more
  Fund
1 month -3.0 %
3 months 2.3 %
This year 24.9 %
2018 -21.1 %
2019 27.6 %
2020 19.0 %
1 year (on annual basis) 43.3 %
3 years (on annual basis) i 17.3 %
5 years (on annual basis) i 17.9 %
Since inception (on annual basis) i 13.8 %
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 1,168.84 M 2021-09-30
Share class size
EUR 1,168.84 M 2021-09-30
Number of shares
3,885,058 2021-09-30
Net Asset Value i
EUR 309.97 2021-10-15
Transaction price i
EUR 302.36 2021-10-01
Morningstar rating â„¢

Fund characteristics per 2021-09-30

Slide to see more
  Fund
Number of holdings 24
Dividend yield i 1.73 %
Weighted average market capitalization i EUR 1,322 M
P/E ratio i 19.30
Kempen Capital Management N.V. (KCM) is the management company of Kempen Oranje Participaties N.V. (the “Fund”). KCM is authorised as a management company and regulated by the Dutch Authority for the Financial Markets (AFM). The Fund is registered under the license of KCM at the Dutch Authority for the Financial Markets (AFM).

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

Developments per 2021-09-30

The following texts refer to the third quarter of 2021

Performance
In the third quarter of 2021, KOP’s Net Asset Value (NAV) increased from €293.99 to €300.85 per participation, bringing the return to +2.3% and +24.9% over the first nine months of 2021. KOP has averaged a return of +17.3% per year over the past three years and +17.9% per year over the past five years, resulting in a performance far above our target of an average of 10% per year in the long term.

Trading
As of 1 October 2021, the trading price was €302.35, based on the NAV of that date plus a premium of 0.5% caused by net inflow into KOP. As of the start of the fourth quarter, the fund’s size is €1.2 billion. For the next trading date of 3 January 2022, an instruction deadline of 4pm on 30 November 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 review
The MSCI Europe Index remained largely unchanged in the third quarter of 2021, while the MSCI Europe small cap index climbed by 1.9% and in doing so outperformed US small caps (-2.4%). Following a period of relative optimism in the summer months, sentiment underwent a reversal in the last weeks of September. Market prices are driven by trends in corporate earnings and interest rates (the discount rate for corporate earnings) and in the short term both variables are evolving negatively, namely (expected) corporate earnings downwards and interest rates upwards. The main reason is rising inflation owing to higher energy prices and logistics costs and shortages of all kinds of commodities, components and especially computer chips. Moreover, worker shortages in many industries are causing perceptible wage inflation. The US central bank’s assertion that the current above-average rate of inflation might be less temporary than it had previously supposed pushed US bond yields higher and caused global equity markets to slump. Finally, fresh lockdowns have been imposed in countries such as Vietnam and Australia over the past few weeks and economic growth is slowing considerably in China (partly due to the Evergrande debacle and power shortages). There is consequently enormous uncertainty as to whether businesses will be able to meet their earnings expectations for 2021 and September saw listed companies issue their first profit warnings. Most of the shortages are expected to be resolved in the course of 2022 and – combined with persisting robust consumer demand – the profitability of companies will then improve further.

Portfolio
Within the KOP portfolio, the strongest climbers in the third quarter were El.En (+30.2%), Sthree (+25.5%) and DiscoverIE (+20.7%), while the laggards comprised Avon Protection (-25.6%), Suess Microtec (-19.5%) and ForFarmers (-13.1%).

ForFarmers has been a source of concern to us for some time now. The Western European market for animal feed is under pressure and on top of this the weak operational situation at the company has led to disappointing earnings growth over the past few years. Via its Horizon 2025 programme the management has formulated a growth strategy that is partly based on acquisitions in growth markets in Europe and beyond.

From a risk/return perspective, it has so far been impossible to ascertain whether the acquisition of activities in a new country creates shareholder value. ForFarmers’ acquisition track record in the United Kingdom and Poland does not inspire confidence on this. Furthermore, ForFarmers has no M&A experience in markets outside its existing geographical clusters. In searching for likely acquisition candidates with a leading position in a structural growth market, there is a high risk of ForFarmers paying an unattractive price. The size of the company is growing but doubts persist as to whether this will create shareholder value as well. An acquisition costing €100 million could perhaps add €10-15 million in operating profits, too small an amount to give ForFarmers as a group a structural growth profile.

We advocate strengthening the company’s operational management, divesting poorly-performing foreign activities (particularly the UK) and reimbursing capital to the owners of the company alongside selective acquisitions in existing key markets in which synergies can be achieved (Benelux). Given ForFarmers’ limited knowledge of overseas markets combined with the probability of it having to pay high prices for feed companies in structural growth markets, we view the company’s current growth strategy as too risky for shareholders as well as for Dutch farmers who are both shareholders (via the FromFarmers cooperative) and customers of ForFarmers. We have shared our opinion with the management and supervisory board members and asked them to reconsider the current strategy. We have likewise sought contact with the FromFarmers cooperative. For us a successful outcome to these talks is a precondition for remaining long-term engaged shareholders in ForFarmers. The company’s attractive equity valuation and robust balance sheet help to counterbalance the above and we will of course also take both of these into account in any future decisions regarding our position in ForFarmers. We therefore hope that ForFarmers will be flexible about its strategy and follow the example set by a number of other Dutch companies, such as SBM Offshore and Intertrust, in using the current price weakness to create value by buying back a portion of the company at a low price. This is a much less risky option.

On 27 September, Italian private equity investor Investindustrial announced its intention to offer a price of €16.50 for all La Doria shares in circulation, with it already having concluded an agreement in principle with the Ferraioli family, the majority shareholder of 63% of the shares. The bid represents a discount of nearly 7% on the closing price on 23 September when rumours of a takeover had not yet affected the equity price. This is remarkable, even if an agreement has already been agreed with a 63% shareholder. Normally, a premium is offered to persuade the (minority) shareholders to agree to the offer. The investor has been granted a period of exclusivity until 20 October to complete its due diligence, after which a formal bid will probably be submitted. We are still deliberating on our position on this offer.

Avon Protection (formerly Avon Rubber) initially published a profit warning in August and then reported positive news after all in September when two delayed contracts (for helmets and bulletproof vests) were finally signed with the US Department of Defense. The contract for second generation helmets had previously been disputed by a competitor and has now been restructured without any negative impact on Avon. Following a delay caused by a failed First Article Test at the end of 2020 (the impact of a bullet had exceeded the margin of error on one of the vests) and an adjustment to the product structure, Avon was given the go-ahead and signed a contract to deliver the new generation bulletproof vests. The profit warning dented investor confidence in Avon and it will be some time until this is restored. We have used the equity price weakness to increase our position in Avon Protection.

Acomo intends to appoint American Kathy Fortmann as its new CEO. Her background is in food ingredients at Dupont, Cargill and Friesland Campina. This subsector within Acomo will be her primary focus. In addition to its trade activities (spices, tea, nuts), Acomo has spent the past few years building up a portfolio of food ingredients in international niche markets, partly via acquisitions. Acomo already owns industrial food operations such as Snick and Red River and will further expand these companies over the next few years. Current CEO Allard Goldschmeding will resume his former post of CFO. We welcome this strengthening and expansion of Acomo’s management board and look forward to the rollout of the growth strategy in the wake of the company’s successful acquisition of Tradin last year.

Our participations Kendrion and DiscoverIE both announced small-scale but interesting acquisitions in the past quarter. Kendrion has bought Dutch company 3T, a software developer primarily for ASML, with offices at the technical universities in Twente and Eindhoven. DiscoverIE has acquired Beacon (a US developer of System on Module embedded computing boards for the medical, industrial and aerospace sectors) as well as Antenova (a UK developer of antennas and radio frequency modules for industrial connectivity applications). Prior to the acquisitions, DiscoverIE also held a share issue in which we participated and in doing so maintained our capital interest at the same level.

As usual, we have a number of new participations under accrual. 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.

Valuations
The value of the KOP portfolio increased across the quarter. The portfolio’s cash-adjusted price/earnings ratio (EV/EBIT 2022E) stands at 17. 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.

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

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

Performance per 2021-09-30 (rebased)

No chart data available

Performance per 2021-09-30

Slide to see more
  Fund
1 month -3.0 %
3 months 2.3 %
This year 24.9 %
2018 -21.1 %
2019 27.6 %
2020 19.0 %
1 year (on annual basis) 43.3 %
3 years (on annual basis) i 17.3 %
5 years (on annual basis) i 17.9 %
Since inception (on annual basis) i 13.8 %
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
2021-05-27
Number of distributions per year
1
Dividend calendar

Risk analysis (ex post) per 2021-09-30

Slide to see more
  3 years Since inception
Maximum drawdown i -23.08 % -63.64 %
Tracking error i 10.48 % 9.45 %
Information ratio i -0.22 0.25
Beta i 0.75 0.83
Kempen Capital Management N.V. (KCM) is the management company of Kempen Oranje Participaties 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.

Geographic allocation (2021-09-30)

28.9 %
United Kingdom
18.2 %
Netherlands
9.4 %
Germany
9.0 %
Italy
8.9 %
Sweden
8.3 %
Switzerland
6.2 %
France
5.2 %
Singapore
3.6 %
Ireland
1.5 %
Cash
1.0 %
Finland
Total
100 %

Sector allocation (2021-09-30)

37.4 %
Industrials
19.3 %
Technology
16.7 %
Consumer Discretionary
13.9 %
Consumer Staples
11.2 %
Health Care
1.5 %
Other
Total
100 %
Kempen Capital Management N.V. (KCM) is the management company of Kempen Oranje Participaties 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

Slide to see more
Management fee i
0.750 %
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 2020.

Other costs

Slide to see more
Kempen Capital Management N.V. (KCM) is the management company of Kempen Oranje Participaties 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

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 N.V. (KCM) is the management company of Kempen Oranje Participaties 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 Oranje Participaties 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.

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.

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).

  •     2050 commitment: Net-zero investor.
  •     2030 ambition: To align with a Paris Agreement pathway (listed and non-listed investments) and Dutch Klimaatakkoord.
  •     2025 objectives: To align with a pathway towards achieving the Paris Agreement (listed investments) and Dutch Klimaatakkoord goals.[1]

Â

The Kempen climate change policy can be found here (under climate change policy).

Â

[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.

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. 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.

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, 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.

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.

Risks

For more information about the mid and long term risks associated with the investments:

Â

--------------------------

* Although Kempen Capital Management N.V.’s information providers, including without limitation, MSCI ESG Research LLC and its affiliates (the “ESG Parties”), obtain information from sources they consider reliable, none of the ESG Parties warrants or guarantees the originality, accuracy and/or completeness of any data herein. None of the ESG Parties makes any express or implied warranties of any kind, and the ESG Parties hereby expressly disclaim all warranties of merchantability and fitness for a particular purpose, with respect to any data herein. None of the ESG Parties shall have any liability for any errors or omissions in connection with any data herein. Further, without limiting any of the foregoing, in no event shall any of the ESG Parties have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

ESG Report
Screening MSCI ESG Research
Screening MSCI ESG Research
UN global impact
ESG integration in the investment process
ESG integration in the investment process
Bron en
disclaimer en
Kempen Capital Management N.V. (KCM) is the management company of Kempen Oranje Participaties 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.