September ends with sharp drops in the equity market. The stock market’s status quo, has not fundamentally changed. Everything is still focused on inflation. The message from the central banks has been clear: The priority is to control inflation, even at the cost of sacrificing more growth and employment. In recent weeks, this has led to increased expectations of further interest rate hikes, and the conviction that these will remain high for longer.

Pareturn GVC Gaesco Columbus European Equity Fund Class I fell 10.63% during September, worse than European stock markets. Since its inception in June 2008, Columbus has returned 103.38%, far outperforming European equity indices. The volatility during the last twelve months has been 20%.

We continue to think that the key to the behaviour of the markets is the future evolution of inflation. The falls we have seen in the price of oil and other raw materials, as well as the easing of supply chain disruptions and improvements in freight prices should result in lower inflation. We believe that these decreases will begin to materialize in the last quarter of this year and especially in 2023 when last year’s energy increases will fall out of the calculation.

In many aspects, the fundamentals remain favourable: labour demand is at record levels both in the US and Europe, the financial system is well capitalized, families have high levels of savings accumulated during the pandemic, companies have not increased their productive capacity. Nevertheless, growth in 2023 will be weak with a growing risk of recession, especially in Europe (late 2022-early 23) and in the US next year.

As for the portfolio, the fund underperformed the market over the month, with many companies falling sharply, with no news on individual stocks. Highlights, on the positive side:

  •   Ariston (+17.06% in September). The Italian heater company announced the purchase of Centrotec Climate Systems GmbH. The acquired company is a world leader in heat pumps. It is an acquisition that complements the range of Ariston products and allows entry into other segments such as ventilation.
  •   Krones (+10.35%). The German bottling machinery company raised its expected sales guidance for this year, while hoping to maintain its margins. During the month, we also completed the sale of VGP, Safestore and Dormakaba.

We reiterate what we said last month: we think that stock markets will react positively when we start to see better inflation data, in the last quarter of this year and in the first quarter of next year. European equity valuations are below their average valuations in recent years, mutual funds have increased their cash levels dramatically and investor pessimism is at its highest level since 2009. All of these are positive indicators for future stock behaviour. We do not know if it is the best time to buy but it is a good time.

 

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We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018, both national and foreign investors can access the Columbus strategy through the Master-Feeder structure between Columbus 75 Sicav in Spain (feeder) and the registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund in Luxembourg (master). The Luxembourg vehicle offers institutional and retail share classes denominated in euros. We have also just set up a sterling share class to facilitate investment from the UK.

Pareturn GVC Gaesco Columbus European Equity Fund class I rose by +6.20% in July. In the last twelve months, the Fund fell by -12.65% but its 3-year performance remains strong at +20.21%. Since its inception in June 2008, Columbus has returned +140.93%, far outperforming European equity indices. The volatility in the last 12 months has been 16%.

The European Central Bank’s first interest rate rise in 8 years took place in July. The US Federal Reserve also raised interest rates again by 0.75pp, to 2.5%. These increases in interest rates have pushed down the yield on 10-year government bonds by almost 1pp from the maximum marked last month. The markets have already priced in the belief that these interest rate changes will suppress inflation whilst also causing a recession, which we believe will not be severe.

We continue to believe that the key to the market’s behavior is the future evolution of inflation. The dips we have seen in the price of oil and other raw materials, as well as the easing of supply chain disruptions, such as improvements in freight prices, hint toward inflation drops, which will materialize in the last quarter of this year and especially in 2023. We reiterate what we pointed out last month: we believe there will be a bullish stock market reaction once inflation data begins to improve. Finally, we also note that fixed income markets are anticipating falls in interest rates next year and that mutual funds continue to hold very high levels of cash. Both are positive aspects for future stock market performance.

Listed companies’ first half results had a positive impact on global stock markets, which have now recovered part of the losses suffered in the first half of the year. The published results of the companies show double-digit growth in sales and a narrowing of margins derived from cost increases in some sectors, but which still allow profits to grow. Only a quarter of the companies in the markets have published lower than expected results.

Three companies stood out in the Columbus portfolio this month:

  • You Gov (+26.2% in July): The British online data analysis company increased revenues by 28% in the first half of the year whilst establishing healthier margins. The growth of their American business was the principal source of the top-line re-acceleration. Management does not appreciate any changes in customer behavior due to the macroeconomic situation.
  • Senior Plc (+23.2% in July): The British industrial components company increased revenues by 21% in the first half of the year, also with healthier margins. Moreover, they announced they will be distributing dividends again.
  • Neoen (+18.3% in July): The French renewables company income grew by 36% more and showed a 39% improvement in EBITDA. The company also increased its earnings guidance for this year.

Unfortunately, there was negative news from Scor SE. Due to losses associated with climate change, the French reinsurance company posted worse-than-expected results in its Property & Casualty business. In November, they will present a plan to reduce their exposure to this sector. The stock has a dividend of close to 10% with very attractive valuations. We remain positive on its value given the valuation and upcoming restructuring.

The markets are changing rapidly so we believe it is crucial to mold our portfolio to the new reality. The retreat of globalization, and the return of inflation, economic cycles and volatility will mark the markets in the future. Since the last great crisis, now more than 10 years ago, lower growth has been a signal to buy risky assets since, generally, an increase in liquidity was generated by the Central Banks. Investors got used to an environment in which equity and bond markets were negatively correlated, while Central Banks increased liquidity if economic activity deteriorated. We think this will be less likely going forward, as Central Banks assess the risks of increasing liquidity versus higher inflation. We also believe that equity markets will once again factor in more frequent business cycles. All this will generate opportunities for active management, like ours, to add substantial value to our clients.

 

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We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.

september-factsheet-graph

The month of June ends with sharp falls across practically all asset classes. The main equity indices have lost close to 9% of their value. The sharp declines are not just in stock markets. The falls in the fixed income markets have also set off alarm bells. On the positive side, we believe that after falls of around 20% since the beginning of the year, much of the bad news is already reflected in prices.

During June, the Pareturn GVC Gaesco Columbus European MidCap Equity Fund class I fell -10.28%. In the last twelve months the Fund has fallen -11.82%, while it has risen 12.98% over the last three years. Since its inception in June 2008, Columbus has returned 126.87%, far outperforming European equity indices. The volatility in the last 12 months has been 16%. The fund has recently received a four-star rating from Morningstar.

The key continues to be inflation, which is currently highly affected by the price of raw materials, especially energy, and by disruptions in supply chains. The falls that we have seen in the price of oil and other raw materials and the improvements in the price of freight should result in improvements in inflation, which will materialize in the last quarter of this year and especially in 2023. We think that markets will react when we start to see better inflation data.

The market is also closely watching companies’ second-quarter results, especially margins, as it seeks to determine the extent to which companies have been able to pass on price increases to their customers. We believe that the combination of cost increases in transportation, raw materials and labor is not yet fully reflected in analysts’ estimates. Margins and financing costs are two of the main risks with regards to maintaining the high returns on capital achieved during the last two years despite the disruptions caused by Covid.

On the positive side, we believe that after falls of around 20% since the beginning of the year, much of the bad news is already reflected in prices. The valuations of many good companies are already much more realistic. We are positive for the next twelve months. Keep in mind that markets start to rise when you’re pricing in a recession, data is bad, and company earnings have been revised down. Fixed income futures are also beginning to anticipate falls in interest rates next year and investment funds are at record levels of liquidity after the sales of recent days. We’re not there yet, but we are fast approaching.

 

 

Download monthly factsheet [PDF]

We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.

During May, the Pareturn GVC Gaesco Columbus European MidCap Equity Fund Class I fell by -1.02%. In the last twelve months the Fund has fallen by -2.11%, but has risen by 29.82% in the last three years. Since its inception in June 2008, Columbus has returned 152.86%, comfortably outperforming European equity indices. The volatility in the last 12 months has been 13%. The fund has recently received a four-star rating from Morningstar.

May has been a continuation of the situation of recent months. Inflation remains at a four-decade high, with no evidence that it has yet peaked. Recent increases in energy and food prices, coupled with supply chain constraints, continue to affect Western economies. Expectations of interest rate hikes by central banks have increased. For this year, the markets are already discounting hikes by the US Federal Reserve at each of the next four meetings, with rates expected to end up above 3%. In Europe, the Central Bank already changed its tune in March and opened the door to start raising rates in July, with one more increase, at least, expected in September. The growth expectations for this year and next continue to be reduced while those for inflation have increased. Several private institutions predict a recession for next year, both in Europe and in the US that will be brief and relatively mild.

On the positive side, companies are posting better results than expected. In our meetings with companies, they confirm that sales and orders continue to be very strong, with inventories higher than normal, and that customers are accepting inflation-induced price increases. The short-term indicators related to services have improved in the first quarter of the year due to the lifting of travel restrictions, while those related to manufacturing have worsened due to the rising prices of raw materials and the disruptions in supply chains.

Several stocks in the fund have performed positively during the month, after presenting good results. We highlight the following:

  • Krones (+17.78% in the month), the German bottling machinery manufacturer announced exceptional results (+12.9% revenue) in the first quarter of the year, while reaffirming its expectations for this year
  • Interpump (+10.6%) the Italian company specialized in the production of water pressure pumps and one of the main groups in the hydraulic sector also presented its numbers for the quarter. Revenue increased by 15.5 % while maintaining their very high margins of 23.4%
  • Unicaja (+9.05%), the Spanish bank, which has recently completed its merger with Liberbank, has benefitted from interest rate hikes. Its results were unsurprising, with increases in commissions and stable margins.

On the other hand, companies with exposure to the real estate sector such as VGP or Safestore have been heavily penalized by the expected increases in interest rates. Both companies are in growth segments (logistical parks and self-storage) In our conversations with their management, they highlight the strong increase in revenues for the coming years and their confidence in maintaining margins. We believe that the recent price decline is an opportunity to buy these quality companies.

Our portfolio continues to change and adapt to our expectations of the post-covid economic situation. In the Columbus Fund today, industrial and consumer stocks are prominent with a tilt to “economic normalisation stocks” — companies that were affected by the pandemic that are now returning to normal activity, such as tourism and leisure. We have not taken a position in companies related to the energy sector, which have performed well lately, since we do not have visibility on how energy prices will perform in the medium term. In late 2019, we had a sizeable position in stocks related to technology, software, renewable energy, and health (40% of the portfolio). In the intervening period, several of these holdings were sold for valuation reasons whilst some were taken over. Consequently, only 6% of the portfolio is invested in technology consulting businesses. We continue to maintain our renewables position in Neoen.

Value and growth are commonly used terms of distinction among equity investors who are often convinced of one approach or the other, however, we have a more pragmatic vision. We look for companies trading below our calculation of intrinsic value, but to hold these stocks for the long term we also look for significant potential for growth. In some cases, most of our expected return will come from revenue growth, and in other cases from a correction in the company’s undervaluation. By investing in a variety of opportunities, we are less exposed to changes in market sentiment, such as the one currently taking place.

 

Download monthly factsheet [PDF]

We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.

During April, the Pareturn GVC Gaesco Columbus European MidCap Equity Fund class I fell by -1.22%. In the last twelve months the Fund has risen by 2.87% and by 22.06% in the last three years. Since its inception in June 2008, Columbus has returned 155.47%, comfortably outperforming European equity indices. The volatility in the last 12 months has been 13%.

Inflation remains at the highest level for the last four decades, with no evidence that it has yet peaked. The US Federal Reserve raised rates by 50 bp to 0.75% in the last meeting and could end the year above 2%. In Europe, the Central Bank changed its tune in March and opened the door to increases in interest rates in the second half of the year. Consequently, growth expectations for this year and next have been reduced while inflation forecasts have increased.

On the positive side, companies are posting better results than expected. In our meetings with companies, they confirm that sales and orders continue to be very strong, with inventories higher than normal, and that customers are accepting inflation- induced price increases. The short-term indicators related to services have improved in the first quarter of the year due to the lifting of travel restrictions, while those related to manufacturing have worsened due to the rising prices of raw materials and the disruptions in supply chains.

gráfico performance informe abril 2022 april 2022 report

Several stocks in the fund have performed positively during the month, particularly those that benefit most from the normalisation of economic activity:

Autogrill (+11.65% in the month), the Italian airport and highway restaurant company, controlled by the Benetton family, rose due to its potential merger with Dufry, the duty-free store company.
Dalata Hotel (+10.6%), the Irish hotel company, announced that revenues per room continue to recover and in March and April exceeded 2019 figures.
Getlink (+9.05%), the operator of the tunnel between the United Kingdom and France continues to is now at pre-pandemic levels of traffic.

On the other hand, industrial companies such as Interpump (-14.5%) have performed poorly given the market’s fear of rising raw material prices. It is worth noting, however, that in our conversations with the Italian company, they highlight the strong increase in orders and sales, and their confidence in maintaining margins. We believe that the recent price decline is an opportunity to buy a quality under-priced company.

Our portfolio continues to change and adapt to our expectations of the post-covid economic situation. In the Columbus Fund today, industrial and consumer stocks are prominent with a tilt to “economic normalisation stocks” — companies that were affected by the pandemic that are now returning to normal activity, such as tourism and leisure. We have not taken a position in companies related to the energy sector, which have performed well lately, since we do not have visibility on how energy prices will perform in the medium term. In late 2019, we had a sizeable position in stocks related to technology, software, renewable energy, and health (40% of the portfolio). In the intervening period, several of these holdings were sold for valuation reasons whilst some were taken over. Consequently, only 6% of the portfolio is invested in technology consulting businesses. We continue to maintain our renewables position in Neoen.

Value and growth are commonly used terms of distinction among equity investors who are often convinced of one approach or the other, however, we have a more pragmatic vision. We look for companies trading below our calculation of intrinsic value, but to hold these stocks for the long term we also look for significant potential for growth. In some cases, most of our expected return will come from revenue growth, and in other cases from a correction in the company’s undervaluation. By investing in a variety of opportunities, we are less exposed to changes in market sentiment, such as the one currently taking place.

Download monthly factsheet [PDF]

We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.

During March, the Pareturn GVC Gaesco Columbus European MidCap Equity Fund class I fell -2.21%. In the last twelve months the Fund has risen by 5.39% and by 32.81% in the last three years. Since its inception in June 2008, Columbus has returned 158.6%, comfortably outperforming European equity indices. The volatility in the last 12 months has been 13%.

The increase in volatility that we have witnessed in equity markets in recent months has continued in March. Inflation remains at record levels for the last four decades, with no evidence that it has yet peaked. The US Federal Reserve has joined those Central Banks who have already begun to raise rates such as the United Kingdom, Brazil, Mexico, among others. In the US, the markets are already pricing in increases at each Fed meeting, and could end the year above 2%. In Europe, the Central Bank changed its tune in March and opened the door to increases in interest rates in the second half of the year. As a consequence, growth expectations for this year and next have been reduced while inflation increases. The interest rate curves of developed countries continue to rise — in Europe, yield curves have started to see some flattening with the German 10yr at 0.7% and 2yr at 0%, while in the US the spread between the 2yr and 10yr is completely flat. The probability of a period of low growth and high inflation, the much feared “stagflation”, begins to increase. The short-term indicators related to the service sector have improved in the first quarter of the year due to the lifting of travel limitations, while those related to manufacturing have worsened due to the rising prices of raw materials and disruptions in supply chains and production. Inflationary tensions in both raw materials and wages remain strong with customers accepting price increases, which has enabled companies to maintain margins. On the positive side, results season has been better than expected. In our meetings with companies, they confirm that both sales and orders continue to be very strong, while inventories are higher than normal.

Several stocks in the fund performed positively during the month, including Getlink (+11.65%), the operator of the tunnel between the UK and France, which benefited from the relaxation of COVID restrictions. Additionally, Unicaja, a Spanish bank with a large mortgage loan portfolio, has appreciated by 12.46% as the market prices in the anticipated increases in interest rates. Finally, due to positive sentiment toward renewables, Neoen, rose by 12.07%. On the contrary, industrial companies with exposure to the automotive sector such as Duerr (-17.07%) or Bodycote (-15.06%) have performed poorly given the ongoing high raw material prices and disruptions in the automotive sector.

Our portfolio continues to change and adapt to our expectations for the post-conflict economic situation. In the Columbus Fund today, industrial and consumer stocks are prominent with a tilt to “economic normalisation stocks” — companies that were affected by the pandemic and that are now returning to normal activity, such as tourism and leisure. We have not taken a position in companies related to the energy sector, which have performed well lately, since we do not have visibility on how energy prices will perform in the medium term. In late 2019, we had a sizeable position in stocks related to technology, software, renewable energy and health (40% of the portfolio). In the intervening period, several of these holdings were sold for valuation reasons whilst some were taken over. Consequently, only 6% of the portfolio is invested in technology consulting businesses. We continue to maintain our renewables position in Neoen.
Value and growth are commonly used terms of distinction among equity investors who are often convinced of one approach or the other, however, we have a more pragmatic vision. We look for companies trading below our calculation of intrinsic value, but to hold these stocks for the long term we also look for significant potential for growth. In some cases, the majority of our expected return will come from revenue growth, and in other cases from a correction in the company’s undervaluation. By investing in a variety of opportunities, we are less exposed to changes in market sentiment, such as the one currently taking place.

Download monthly factsheet [PDF]

We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.

september-factsheet-graph

During February the Pareturn GVC Gaesco Columbus European Midcap Equity Fund class I fell by -4.12%. Over the past twelve months the Fund has risen by 11.46%, and by 35.15% over the last 3 years. Since inception in June 2008, Columbus’ return has been 164%, comfortably exceeding the broad European equity index.  The volatility over the last 12 months has been 13.01%.

Equity markets fell in February as fears about a possible Russian invasion of Ukraine became reality. The resulting concerns about possible economic impacts add to the existing anxiety around inflation. Before the conflict, this had been the clearest issue in financial markets, driving long-term bond rates to new highs. However, as the Russia-Ukraine conflict has increased global risks the resulting change in sentiment has caused a flight to safe assets and a renewed increase in the US dollar. Sanctions have led to sharp increases in the price of many commodities, particulary energy, impacting our central scenario of economic recovery for this year and next. A prolonged period of volatility in financial markets now seems likely as growth expectations fall but inflationary pressures remain. The associated sharp sell-offs are providing attractive long-term entry points for some high quality companies and our cash position gives us the scope to take advantage

Gráfico Performance | Columbus

Across the Columbus portfolio we saw a similar sharp reversal in fortunes for some of the holdings with Duerr, the German listed industrial machinery group (-18%) and S&T, the Austrian IT consultancy (-16%) suffering the most. Along with other suppliers to the automotive industry, Duerr was impacted early in the month by concerns over the effect of rising raw material costs and the on-going weakness in auto production due to supply shortages for certain key components. For S&T, as for many service companies the recent weakness was related to the expectation of further increases in salary costs as the inflationary forces work through the system. In the final days of the month both stock, and most of the portfolio, fell on the news of the invasion.

Despite this concerning backdrop several stocks on the fund bucked the trend including both YouGov, the UK listed marketing services group (+9%) and Neoen, the French renewable energy company (+8%) showing solid returns. Neoen reported a strong set of full year results, revealing a better than anticipated project win rate in the fourth quarter and reiterated their mid-term growth targets. During the month we sold our position in Akka Technologies as the price rose to the level of the bid. We used the proceeds to add to positions in several holdings including Financials.

It is interesting to look back on how our portfolio has been changing over the last two years, since before the pandemic hit. In late 2019, we had a sizeable position in technology, software, renewable and health related stocks (40% of the portfolio). In the intervening period several of these holdings were sold on valuation grounds, some were taken over, with now only 6% of the portfolio invested in technology consultancy businesses. In the Columbus fund today, industrials and consumer stocks are prominent with a tilt to “economic normalizations stocks”, which are companies that were hit by the pandemic and are now returning to normal trading conditions.

Download monthly factsheet [PDF]

We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.

During January, Columbus European Equity Fund Class I fell by 5.08%. Over the past 12 months the Fund has risen by 19.23%, and by 47.42% over the past 3 years. Since inception in June 2008, Columbus’ return has been 175.73%, comfortably exceeding the broad European equity index. These results have been achieved with a volatility of 11.74% over the last year, below that of the Stoxx 600 at 13.1%.

The new year began with an increase in volatility and falls across global equity markets. There were several reasons for the correction, with the most important, in our view, being the strong increase in inflation, well above levels seen in recent years, and with little sign of a short-term peak. The reversal in trend for central banks, which have now begun to increase interest rates, was more than enough to spur this concern into action. As a result, markets are now expecting the Federal Reserve to begin steadily increasing rates from March. The inflation picture is partly influenced by the recent increase in energy prices which reached levels not seen since 2014. Prices have been partly impacted by the ongoing geopolitical tension between NATO and Russia over Ukraine and show little sign of abating. On the positive side, the company results have generally surprised positively, and economic activity continues to recover as the restrictions due to Covid are progressively withdrawn.

As for the portfolio, those sectors with positive correlation to higher interest rates and economic recovery have been outperforming, while the most highly valued stocks have seen the biggest declines.  The holdings which contributed most to performance during the month were Unicaja Banco (+4.8% in the month), the Spanish banking group and Dalata Hotels (+14%) in Ireland. Bank stocks in general tend to be beneficiaries in periods of rising interest rates and Unicaja is more sensitive to this impact than many other listed banks across the region. Dalata, by contrast, benefitted from the easing of Covid restrictions which has led to hopes of a more significant recovery in travel. The weaker contributors were two of our Italian holdings, Interpump (-15.7%), specialist engineering group and Reply (-17%) technology consultancy, which saw their valuations fall. Operationally both continue to perform extremely well.

It is interesting to look back on how our portfolio has been changing over the last two years, since before the pandemic hit. In late 2019, we had a sizeable position in technology, software, renewable and health related stocks (40% of the portfolio). In the intervening period several of these holdings were sold on valuation grounds, some were taken over, with now only 6% of the portfolio invested in technology consultancy businesses. In the Columbus fund today, industrials and consumer stocks are prominent with a tilt to “economic normalizations stocks”, which are companies that were hit by the pandemic and are now returning to normal trading conditions. Value and growth are commonly used terms of distinction among equity investors who often have conviction towards one approach or the other. However, as investors in the Columbus fund will be aware, we take a more pragmatic view. Clearly, we look for companies which trade below our calculation of intrinsic value, but in order to hold these companies for the longer term we also look for significant potential to grow. In some cases, most of our expected return will come from growth in revenues, and in other cases from a correction in the under-valuation of the company. By investing in a range of opportunities we are less exposed to shifts in market sentiment such as the change currently underway.

 

Download monthly factsheet [PDF]

We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.

During December Columbus European Equity Fund Class I rose by 5.45%. Over the past 12 months the Fund has risen by 21.4%, and by 65.81% over the past 3 years. Since inception in June 2008, Columbus’ return has been 190.5%, comfortably exceeding the broad European equity index. These results have been achieved with a volatility of 10.75% over the last year, lower that the one of the European equity markets at 12.0%.

European markets bounced back convincingly in December as Omicron concerns eased and business confidence measures showed continued improvement. Unsurprisingly this led to strong performances from stocks in the Leisure and Travel sectors which had been hit hardest by the arrival of the new variant. This particularly benefitted our holdings in National Express (+20.4% in the month, UK listed public transport operator), Kinepolis (+16.7% Belgium, Cinemas operator) and Talgo (+17.9% Spanish railway operator).

The largest contribution to performance, however, came from our positions in Interpump (+8.1%) and VGP (+8.7%). Interpump, the Italian listed specialty industrial group, has been a long time holding for the fund and continues to show solid growth both organically and through M&A. We supported our position in VGP, the Belgian listed logistic property developer, during November as they raised additional equity for expansion. VGP has considerable opportunity for growth in our view and continues to enter new markets with their proven strategy. The main detractor in December was S&T AG (-23.1%), the Austrian IT company, which suffered from an aggressive short attack after an independent research group published a report outlining a range of issues from the past. The company quickly responded with a detailed rebuttal, but the damage was done for December.

It is always helpful to look back over the past year to review our holdings and track our decision making. The two themes which dominated investor attention through the year were the resurgence of inflation and, of course, the pandemic. Inflation, though much discussed, had little direct impact during 2021, but may well be a bigger concern over the coming 12 months. The pandemic, however, had a more material impact on the fund as a number of our holdings experienced weakness during the summer months when the expected rebound in tourism was curtailed by the arrival of the new variant. Happily most of these stocks recovered during the second half of the year to provide a positive contribution to performance.

Adding to this was the performance boost we received from having three of our holdings taken over during the year. It is a relatively common event to lose a holding to a takeover, but to have three in one year is unusual. Amongst these, the biggest positive impact came from Zooplus, the German listed pet products group. Over the course of the year the stock rose over 180% after the original private equity bidder was challenged by other interested parties and a bidding war ensued. We eventually sold the stock when this process was complete. Akka Technologies (French digital consultancy) and Zardoya Otis (Spanish elevator subsidiary) were also both helpful contributors to performance, with Akka in particular returning around 85% for the year. Our position in Liberbank in Spain was also acquired as part of a consolidation with Unicaja Banco to create a stronger, more sustainable player in the domestic Spanish banking market. The largest negative contribution for the year came from Neoen, the French listed alternative energy group which performed extremely well in the prior year but gave back some of this performance in 2021.

As we enter 2022 we feel very comfortable with the structure of the portfolio and the combination of both value and growth opportunities that we hold. Although some extreme points across markets, such as segments of the technology sector, appear expensive relative to historical valuations this is not generally true across much of the European market. We continue to find compelling investment opportunities in often overlooked businesses and feel confident of generating strong returns in the future.

Download monthly factsheet [PDF]

We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.

During November the Columbus European Equity Fund class I fell by -3.2%. Year to date the Fund has risen by 15.14%, and by 21.2% over the past 12 months. Since inception in June 2008, Columbus’ return has been 175.5%, comfortably exceeding the broad European equity index. The volatility of the Fund over the last 12 months has been 10.7%, below the STOXX 600 index at 12.0%.

Grafico performance noviembre | Columbus

The weakness in equity markets in November resulted from the increase in hospitalisations across Northern Europe and the arrival of a new Covid mutation, the ‘Omicron variant’, which was first identified in South Africa. Concerns over the impact of the upsurge likely contributed to the fall in the German IFO business climate survey data, as businesses worried about the potential for renewed lock-downs during the important Christmas season. The news led to a general flight to safety from investors as shares in affected sectors such as travel and hospitality were sold in favour of the better visibility coming from the IT and pharmaceutical sectors.

Germany was the source of other important news during the month after the various factions of the new government reached agreement on their ‘traffic light’ coalition. Olaf Scholz of the leading SDP is to take the reins as Chancellor, ending Angela Merkel’s successful 16 year tenure in the role. Unsurprisingly the coalition is placing great emphasis on the climate, which was outlined by voters as the issue of most concern, but national labour laws are also likely to be an area of focus.

Within the portfolio, Auto Trader, (+ 20.9% in the month) the UK online car sales site was the strongest contributor after reporting an excellent set of first half numbers with revenue growth of 82% vs the weak 2020 early pandemic phase, but also 15% above the strong 2019 figure. The group dominates the car sales market in the UK and have been consistently able to expand along the value chain. Ageas, (+8.4%) the Belgian listed Life and Non-Life insurance business also reported strong figures, and despite the impact of some significant natural disaster claims, reiterated their earlier targets and those for their longer-term strategic plan. The company overall, and particularly the Asian business, continues to generate a strong free cash flow and remains under-appreciated in our view.

On the more negative side, Royal Unibrew, (-12.4%) the Danish brewer, gave up much of its earlier strong performance in the year after announcing the impact of higher freight and raw material costs in the third quarter. This has been a common refrain throughout the recent results period and unsurprising given some of the well-publicised global supply chain issues. We continue to see a very strong longer-term opportunity for the group and view much of the current margin weakness as a temporary hiatus while the higher costs are transferred into prices. We added no new names to the fund in November but added to our position in VGP (Belgian listed logistics real estate business) and trimmed both Interpump (Italian specialist engineering) and SIG Combibloc (Swiss packaging equipment).

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We thank you for your trust and wish the best to you and your families during these uncertain times.


Since June 14, 2018 both domestic and foreign investors have been able to access the Columbus strategy via the master-feeder structure between the Columbus 75 Sicav in Spain (feeder) and the Luxembourg registered Pareturn GVC Gaesco Columbus European Midcap Equity Fund (master). The Luxembourg vehicle offers both institutional and retail share classes.