Tag Archive for: Columbus European Mid-Cap Equity

Report March 2021

During March the Columbus Fund rose by 3.59%. The Fund has beaten the market both over a 12-month period (+44.61%) and since the market reached its lowest point on the 18th March 2020 due to the coronavirus-induced market crash (73.03%). Since inception, in June 2008, Columbus’ returns have been 141.36%, comfortably exceeding the broad European equity index.

Over the first quarter of the year, investors have experienced a sharp rotation away from the more growth-oriented sectors, such as Technology, into more cyclical areas such as Commodities and Materials. In addition, the focus has shifted towards stocks which are traditionally seen as ‘value’, a style that had consistently underperformed over the past decade. This notable change of focus stems from a combination of rising bond yields and an increasing confidence in an economic recovery as the global vaccination program gathers momentum.

As mentioned in last month’s report we have been able to take advantage of the performance of some of our longer-term holdings to switch into opportunities which offer a more attractive risk-reward. Amplifon and Avast, for example, were sold during the month and have provided a combined return of more than 90% since purchase. The proceeds from the sale helped to boost some of our exiting holdings as well as starting a position in DormaKaba, a Swiss listed access control group which enjoys strong market shares in the European lock markets and significant growth opportunities elsewhere, most notably in the US.

The best performing holdings during March were our two Spanish banks, Liberbank and Unicaja Banco which agreed a merger deal to form the 5th largest bank in Spain. Zooplus, the German listed online pet products retailer also performed strongly after releasing ambitious growth targets for the coming few years. That said, the bulk of the underperformance in the month came from only two stocks, one of which, Neoen, initiated a large capital raise during the month to fund the raft of opportunities they see ahead. The other, AMS AG, suffered in March despite no negative news of note. Beyond these outliers the bulk of the fund has coped well with the changes in the market, and we remain very comfortable with our positioning.

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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.

Report February 2021

During February the Columbus Fund rose by 2.48%, slightly ahead of the benchmark STOXX 600 index which returned 2.31%. Over the past six months the Fund has risen by 12.2%, and by 12.5% over the past 12 months. Since inception in June 2008, Columbus’ return has been 129.7%, comfortably exceeding the broad European equity index. It remains notable that the higher returns do not come with higher risk as the volatility of the portfolio over the last twelve months stands at 26 % vs. 30 % for the STOXX600.

Since the new year equity investors have experienced a considerable shift in market dynamics with the dominance of growth companies over the past few years giving way to more cyclical business models. This resulted from a shift of focus towards economic recovery across Europe as Covid restrictions begin to lift, as well as a notable rise in bond yields, particularly in the US. Commodity prices have been rising steadily, leading to a general reappraisal of inflationary risks across the developed world, which affects the very high valuation multiples of companies in sectors such as technology or biotech. The fund stood up well to this rotation and we have been able to take advantage of a number of opportunities that arose as a result.

Looking within the portfolio we can see the effect of the rotation in the individual stock performances. The best of which came from our more cyclically sensitive holdings which will benefit as lockdowns ease across Europe and travel is once again permitted. Both Melia Hotels (Spanish listed resort hotels) and Fraport (German listed airport operator) contributed strongly as expected but remain considerably below the valuations they would justify in a ‘normal’ environment. Ageas (Belgium listed insurance group) also performed well as a beneficiary of the rising bond yields. Our biggest detractors in February included two excellent companies that are long term holdings on the fund; Reply (Italian listed consultancy) and SIG Combibloc (Swiss carton producer) both of which suffered in the under-current of style rotation.

The valuations of many companies impacted by the pandemic remain well below pre-Covid levels and one example of this is Dalata Hotels which operates in the UK and Ireland. Not only has the company weathered the lock-downs well but they have a considerable pipeline of new capacity ready to come on stream when the environment allows. We have built a position in the stock and see considerable upside as the environment normalises and they are able to restart their planned expansion.

Download monthly factsheet

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.