Report September 2021

During September the Pareturn GVC Gaesco Columbus European MidCap Equity Fund class I fell by – 0.98%, beating the -3.41% return of the STOXX 600 index. Over the past six months the Fund has risen by +13.49%, and by +34.34%% over the past 12 months. Since inception in June 2008, Columbus’ return has been 171.07%, comfortably exceeding the broad European equity index.

European equity markets traded down over the month as the sharp, early phase of the post-covid recovery slowed to a more normal rate. In addition, the ongoing concerns around inflation continued to gather support as energy prices rose further, leading to more public pressure for higher wages. Central bank commentary was incrementally more hawkish with the US Federal Reserve, the European Central Bank and the Bank of England all now planning to reduce their pace of asset purchases over the coming months. Within Europe the much-discussed German elections proceeded smoothly with the more extreme parties garnering less support than some had feared. Although the result will lead to a somewhat complicated structure the broad approach of the yet-to-be-formed government is unlikely to lead to dramatic policy changes.

Grafico performance

Across the portfolio we again enjoyed a strong month of relative performance, helped by our third take-over in as many months. Zardoya-Otis has often been held up as a likely candidate to be fully absorbed by their parent company, Otis in the US. Following the spin-out of Otis from the United Technologies group in 2020 they were free to pursue the buy-out and delisting of the Spanish subsidiary. Zardoya was a relatively recent purchase for Columbus as we felt strongly that the valuation did not reflect the prospects of the business and that this would ultimately be resolved either by the market or by a corporate action. The other material takeover news over September was the continued increase in the bid value for our holding in Zooplus, the German listed online pet supplies group. EQT, a Swedish investment company slightly outbid the increased offer from rival, Hellman & Friedman, with a price of €470 per share – a noteworthy 69% premium to the closing price before the takeover proceedings began.

Unsurprisingly Zardoya (+25.85%) and Zooplus (+22.18) were strong contributors to performance in the month, but Kinepolis (+20.07%), the Belgian listed cinema group also performed well as investors begin to see the positive impact from audiences returning to cinemas. The most significant negative contribution came from Interpump (-6.98%), the long held Italian specialty machinery group. The stock drifted down with the market giving back some of the very strong returns from earlier in the year. This experience was shared by a number of other industrial companies.

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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.