Bellevue Entrepreneur Europe Small

European SMID caps, as measured by the MSCI Europe Small Cap ex-UK Index, rose +7.5% in April, outperforming European large caps (Stoxx Europe 600 5.6%). Markets rebounded on the back of a ceasefire and initial signs of de-escalation in the Middle East. However, with no agreement yet in place, the conflict has shifted into a more prolonged strategic confrontation, disrupting energy flows and maritime trade. While reduced hostilities have supported sentiment, energy markets remain tight. Central banks in the US and Europe held rates steady, but retain a tightening bias should inflation pressures persist. In the event of an agreement, energy markets would likely normalize, easing inflation pressures. The Eurozone Composite PMI declined to 48.6 in April, marking the first contraction in 11 months. Activity was weighed down by a softer services sector (47.4), while manufacturing remained resilient in expansion territory (52.4). In terms of sectors, Information Technology (+21.3%), Communication Services (+9.6%) and Materials (+9.2%) performed best while Consumer Staples (+0.7%), Utilities (+1.3%) and Real Estate (+4.0%) lagged the most.

Against this backdrop, the Fund (B shares, EUR) returned +7.5%, outperforming its benchmark by 4bps. Year-to-date the Fund is up +7% with an outperformance of 158bps.

Top detractors in the month were Montana (-20.8%), Cloetta (-7.2%) and Flughafen Zürich (-6.6%). Montana irritated their shareholders by putting out a very conservative 2027 guidance prompting a 13% downward revision of consensus. Later in the month, the CEO resigned for personal reasons, sending the stock further south. The valuation is very attractive at these levels but needs positive catalysts. Cloetta’s weakened amid a broader staples sell-off, driven by rising concerns over input cost inflation, alongside some profit-taking following a strong first-quarter performance. Flughafen Zürich came under pressure from rising jet fuel prices, despite traffic data YTD trending above FY guidance.

Top performers in the month were Nexans (+37.6%), BESI (+39.0%) and Inficon (+48.6%). Nexans posted solid Q1 results, driven by continued strong growth of 8.8% in its HV division. The group announced the acquisition of Republic Wire in the US - a compelling deal that adds domestic manufacturing and direct market access. This marks a key step toward a further re-rating, with management likely to continue redeploying capital and optimizing the balance sheet. BESI delivered a beat-and-raise quarter. Hybrid bonding is entering a capacity buildout phase in advanced logic, driven by SRAM stacking and co-packaged optics, alongside a likely broad transition from TCB (Thermo-Compression Bonding) in HBM (High Bandwidth Memory) around 2028, underpinned by AI and optical networking megatrends. Inficon delivered strong Q1 sales growth of 14%, driven by a sharp ramp-up in its Semiconductor business, alongside robust order intake and a book-to-bill ratio well above 1x, underpinning a confident upgrade to FY guidance. Margin softness appears transitory, tied to temporary footprint reconfiguration costs, leaving core earnings momentum firmly intact.

Through the noise and market rotations we continue to stray true to our investment framework of 15 years. We look for companies with attractive business models and moats, strong balance sheets, disciplines capital allocation and wrong price tag. Also, we try not to put all our eggs in the same basket and stay diversified through end-markets, themes, geographies and styles. This month we increased our positions in Nexans and Andritz, two undervalues electrification plays, taking some profits in the Swedish confectionary company Cloetta (ytd +20.4) and the Spanish CDMO specialist ROVI (ytd +25.2).