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 2019-04-30 (rebased)

No chart data available

Performance per 2019-04-30

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  Fund
1 month 7.4 %
3 months 7.6 %
This year 18.7 %
2016 32.8 %
2017 42.3 %
2018 -21.1 %
1 year (on annual basis) -4.1 %
3 years (on annual basis) i 18.1 %
5 years (on annual basis) i 18.1 %
Since inception (on annual basis) i 13.2 %
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

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Total fund size
EUR 700.54 M 2019-04-30
Share class size
EUR 700.54 M 2019-04-30
Number of shares
3,527,711 2019-04-30
Net Asset Value i
EUR 180.58 2019-05-24
Transaction price i
EUR 185.91 2019-04-01
Morningstar rating â„¢

Fund characteristics per 2019-03-31

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  Fund
Number of holdings 20
Dividend yield i 3.83 %
Weighted average market capitalization i EUR 935 M
P/E ratio i 17.46
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 2019-03-31

The following texts refer to the first quarter of 2019.

Performance
In the first quarter of 2019, KOP’s Net Asset Value (NAV) increased by 10.6% from €167.29 to €184.98 per participation. Over the past three years the return has averaged +15.7% per year. After a sharply negative fourth quarter of 2018, the market prices of most of our companies underwent a recovery in the first quarter of 2019.

Trading
As of 1 April 2019, KOP’s trading price was €185.91, based on the NAV as of that date and including a premium of 0.5% as a result of net inflow into the fund. This brings the size of KOP to about €660 million, with the number of issued KOP shares increasing by 1.6% as a result of trading. We continue to see interest from prospective and existing clients. For the next trading date of 1 July 2019, an instruction deadline of 4pm on 31 May 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
Macro-economic and political news triggered a rally on the financial markets in the first quarter of the year. In Europe, budget discussions between the Italian government and Brussels were pushed into the background and the Brexit was delayed even further. The most important news came from the US, where the Fed underwent a remarkable policy reversal when it announced that it expected no further interest rate hikes this year due to US economic growth slowing and inflation remaining low. ECB policy will continue to be accommodating for the same reasons. On balance, this had a positive effect on the bond markets, with German government bond yields even dipping below zero at the end of March. China also reported better-than-expected economic data towards the end of the quarter, which relieved investors with respect to the impact of the trade war on the outlook for global economic growth. With the exception of rising oil prices, on balance commodity prices are evolving in a stable manner. Persisting economic growth, stable commodity prices and low interest rates are the ingredients for a positive equity market. European large and small-cap indices were up by 12% and 14% respectively in the first quarter of 2019.

Portfolio developments per 2019-03-31

KOP reported a participation in Dutch company Acomo in the first quarter of 2019.

Acomo is a global trader and distributor of spices, nuts, tea, dried tropical fruits, sunflower seeds and ingredients for the food industry. It operates in attractive product categories that are profiting from the global trend towards healthy and natural foods and from the outsourcing trend atfood companies. Furthermore, these are seasonal products with pricing outside transparent commodity markets, in which product quality and reliability of purchasing and supply form significant added value for suppliers and clients in the food industry.

In the wake of quality improvements within the company implemented by the previous management team, the current management team now has a clear growth target aimed at breathing new life into Acomo and its market price over the next few years. Acquisitions and/or divestments (Sunbutter) have the potential to create considerable shareholder value in the coming years. Acomo holds a war chest containing €100 million, giving it the financial capacity and flexibility to succeed in this.

As a Dutch small cap, Acomo has been well-known to us for many years. Following a relatively weak 2018, in which the company’s product prices, profitability and market price were all squeezed, we have spent the past few months prudently accruing an interest. The combination of annual cashflow yield (about 7%) and autonomous revenue growth at above the rate of inflation (about 3%) means that Acomo should help KOP to achieve its long-term performance target (10%). Our participation in Acomo represents nearly 4% of the portfolio.

Over the past few months we have sold our participation in Germany’s 2G Energy in its entirety. The background to this is a combination of – in our view – insufficient progress on essential organisational improvements, the rising market price and the relatively small weight it occupied in the KOP portfolio (less than 1%).

The 50% increase in the equity price of El.En in the first three months of 2019, in the wake of a 40% decrease in the fourth quarter of 2018, is striking. This is a good illustration of the volatility inherent to the prices of the small caps in which we invest. This confirms our belief that we need to focus on fundamental trends at companies over the long term rather than market sentiment, which in particular in small caps can cause large price fluctuations in the short term.

Following our substantial purchases during the fourth quarter of 2018, in the first quarter of this year we only expanded our position in BESI slightly; our capital interest has again exceeded 5%, however. Partly as a result of the sharply higher price, this continues to be the largest position in KOP at a weight of 14%. During the quarter, we made a few adjustments to our positions in other names based on our beliefs and price potential. In addition, we have a number of new participations under construction that we hope to be able to report on in the coming quarters.

News from our companies
Overall, we are pleased with the annual results reported by our participations, although there are huge differences in profit momentum between the companies. Some are in the midst of a cyclical downward trend (BESI in semiconductors, Kendrion in automotive) or are seeing their end markets peak (SAF Holland in trucks and trailers). Others, such as Coats, Avon Rubber, Lectra, Interroll and Washtec, continue to grow steadily. Forfarmers and Oeneo are also facing sharp increases in commodity prices, temporarily squeezing their profitability, although we expect an upturn in earnings in the course of 2019.

Looking back at the annual results the most positive surprise came from Interroll, while Forfarmers provided the most negative surprise. A combination of highly successful innovations and robust global demand for logistics systems enabled Interroll to report revenue growth of 24% over 2018, which thanks to sound cost control translates into impressive earnings growth of 36%. In retrospect, Forfarmers made a tactical error in the summer of 2018 in fixing procurement terms for commodities for a longer period at a time of high commodity prices (caused by drought and impending scarcity). A decrease in commodity prices (and animal feed prices) at the end of 2018 will squeeze the results for H1 2019, as Forfarmers needs to use up its relatively expensive stock.

With a view to the new phases the companies are entering into, Washtec and SAF Holland both saw a change of CEO in the first quarter. Washtec is on the cusp of major innovations in its products and manufacturing process, to which end it has appointed a Chief Technology Officer and said farewell to its CEO. After a number of years of strong growth and globalisation, SAF Holland will spend the next few years focusing on improving its profitability, especially in North America. Its new CEO has an excellent track record in this respect, and in December SAF Holland added a COO and a Chief Procurement Officer to its management team.

Valuations
The higher prices pushed up the valuation of the KOP portfolio somewhat during the quarter. The portfolio’s cash-adjusted price/earnings ratio (EV/EBIT 2019E) increased from 11 in December 2018 to 12 in March 2019. 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 2019-04-30 (rebased)

No chart data available

Performance per 2019-04-30

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  Fund
1 month 7.4 %
3 months 7.6 %
This year 18.7 %
2016 32.8 %
2017 42.3 %
2018 -21.1 %
1 year (on annual basis) -4.1 %
3 years (on annual basis) i 18.1 %
5 years (on annual basis) i 18.1 %
Since inception (on annual basis) i 13.2 %
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

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Distributing
Yes
Last dividend
EUR 3.60
Ex-date last dividend
2018-05-21
Number of distributions per year
1
Dividend calendar

Risk analysis (ex post) per 2019-04-30

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  3 years Since inception
Maximum drawdown i -21.14 % -63.64 %
Tracking error i 8.72 % 9.39 %
Information ratio i 0.51 0.27
Beta i 0.88 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 (2019-03-31)

33.0 %
Netherlands
15.3 %
United Kingdom
10.6 %
France
10.5 %
Germany
8.7 %
Luxembourg
7.5 %
Switzerland
5.8 %
Italy
1.3 %
Norway
1.2 %
Ireland
6.0 %
Cash
Total
100 %

Top 5 holdings (2019-04-30)

14.8 %
BE Semiconductor Industries
11.0 %
Coats Group
7.8 %
Washtec
7.5 %
Interroll
6.3 %
Forfarmers
Total
47.4 %

Sector allocation (2019-03-31)

42.9 %
Industrial Goods & Services
20.2 %
Technology
19.0 %
Food & Beverage
4.4 %
Automobiles & Parts
4.3 %
Money Market Funds
1.6 %
Retail
1.2 %
Personal & Household Goods
0.3 %
Telecommunications
6.0 %
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

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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

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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

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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

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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.

KCM Vision

Kempen Capital Management is an asset manager with a long-term investment approach. We strongly believe in engaged shareholdership that benefits all stakeholders. As a long-term responsible investor, we firmly believe that active ownership and shareholder engagement contribute to positive change across the board.

Our KCM wide approach to responsible investment

To put our vision into action we engage with our investment targets on a wide array of strategic, financial, environmental, social and governance (ESG) topics. Our long-term investment worldview paired with thorough analysis and an experienced and diverse ESG team allow us to use both voting and engagement as means to consistently encourage positive change. Through this process of constructive engagement, we are able to contribute to the development of principles and standards of corporate responsibility within companies that we invest in. Our full voting records are available here.

Our fund approach to Responsible Investment

  • Continuous dialogue with company management through one-on-one meetings. Meetings with division directors, peers and join analyst and client events. If necessary seek dialogue with the supervisory board
  • Actively involved during the AGMs through the use of our voting rights. We make remarks on the agenda if necessary and we stress our discussion points with the company at the AGM
  • Companies themselves also have the ability to seek the dialogue with us. We provide feedback on corporate strategy, governance and communication at AGM's and in one-on-one's
  • We are focused on the creation of shareholder value, where the company of course has to take into account all stakeholders
  • All holdings are screened by MSCI on sustainability items, if necessary we engage with management on sustainability issues with help from our experts in Edinburgh

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.