Report June 2021

During June the Columbus Fund fell by 0.4%. Over the past six months the Fund has risen by 7.52%, and by 30.87% over the past 12 months. Since inception in June 2008, Columbus’ return has been 148.56%, comfortably exceeding the broad European equity index. 

The economic data across Europe strengthened further in June with the composite PMI achieving a 180-month high of 59.2 and further improvements in consumer confidence and manufacturing activity. However, despite this positive backdrop shares in travel and related sectors weakened over the month as Covid restrictions on travelling across the Continent were tightened in response to the rising incidence of the newer ‘Delta’ variant. We continue to believe in the reopening of the economies in the second half, especially in Europe where vaccination was delayed. Alongside the fight against the pandemic, inflation is the other focus of markets. Central Banks continue to reiterate their message that the rise in inflation is temporary and there has been a reduction in the yields of long term bonds. As bond yields fell the rotation towards growth stocks intensified this month while most cyclical stocks and those that benefit the most from interest rates increasing, like financials and energy, performed poorly.

The largest positive contributions for the month came from our long standing positions in Auto Trader and Interpump. Auto Trader (+11.34% in the month), the UK listed on-line motor vehicle classified business reported very strong results in June, both in terms of revenues and margins,  as semiconductor shortages reduced the supply of new cars pushing up demand for used vehicles. The company also improved their guidance for this year and reinstated the dividend. Interpump (+6.34%), the Italian based engineering group saw their share price rally following the announcement of a new acquisition in the US in the hydraulics area. Management called it “the most significant in Interpump’s history expanding our role as a global player in hydraulics”. We think the valuation paid is very attractive, slightly over 5 times EV/EBITDA.  Within the portfolio our holding in Dalata Hotels, the Irish listed hotel operator, was particularly affected by the Delta variant news, falling 15% over the month. While the delays to the resumption of normal tourist activity are obviously a short-term blow, we remain very confident about the longer-term recovery potential in this space and will use any weakness to add to our positions.

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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.