Report February 2022


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.

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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.