Bellevue Entrepreneur Europe Small (Lux)
Owner-operated or family-run companies think in generations, not in quarters
Solid balance sheets, high innovative strength and safety awareness have a positive effect on the share price
Companies impress with high ESG scores
Please find a more detailed description of share classes here.
The Fund invests in small capitalized, listed owner-managed companies in Europe where an entrepreneur/founder family holds at least a 20% of a company’s voting rights, thereby exerting signif. influence. The team pursues a fundamental, bottom-up approach in identifying the most attractive founder-controlled companies while maintaining an investment portfolio diversified by country, sub-sector and style (Value, GARP, Growth).
Indexed performance (as at: 15.08.2022)
NAV: CHF 257.00 (18.08.2022)
Rolling performance (18.08.2022)
|18.08.2021 - 18.08.2022||-29.78%||-22.71%|
|18.08.2020 - 18.08.2021||36.26%||42.65%|
|16.08.2019 - 18.08.2020||19.08%||9.91%|
|17.08.2018 - 16.08.2019||-21.64%||-11.53%|
Annualized performance (18.08.2022)
|Since Inception p.a.||6.68%||8.21%|
Cumulative performance (18.08.2022)
Facts & Key figures
The Fund invests in small capitalized, listed owner-managed companies in Europe where an entrepreneur or a founder family holds at least a 20% of a company’s voting rights, thereby exerting significant influence. The typical qualities of these companies – a focused business model, fast decision-making processes, sustainable business policies and a strong corporate culture – go hand in hand with efficient innovation, high product quality and strong customer loyalty. The corresponding impact on the share price is demonstrably positive. The Fund’s Management Team offers a wealth of experience in this investment segment and has built up an extensive network with entrepreneurs throughout the sector. It pursues a fundamental, bottom-up approach in identifying the most attractive founder-controlled companies with a small market capitalization while maintaining an investment portfolio of 25 to 40 stocks diversified by country, sub-sector and style (Value, GARP, Growth).Show moreShow less
Investment suitability & Risk
|Investment Manager||Bellevue Asset Management AG|
|Custodian||RBC Investor Services, Luxembourg|
|Fund Administrator||RBC Investor Services, Luxembourg|
|Year end closing||30. Jun|
|NAV Calculation||Daily "Forward Pricing"|
|Cut of time||15:00 CET|
|Subscription Fee (max.)||5.00%|
|Performance Fee||10.00% (with High Water Mark)|
|Total expense ratio (TER)||2.18% (29.07.2022)|
|Legal form||SICAV Luxembourg jurisdiction|
|SFDR category||Article 8|
Key data (29.07.2022, base currency EUR)
|No. of positions||48|
Top 10 positions
Breakdown by sector
Opportunities & Risks
- Owner and family-run businesses think in generations, not in quarters.
- Focus, a sense of responsibility, strong identification with the company, and personal financial commitment have a positive impact on the share price.
- More conservatively financed, lower debt exposure and a higher risk capacity compared to non-family businesses.
- Multi-award-winning management team with a long and successful track record investing in owner-run firms.
- Entrepreneurs for entrepreneurs – the Bellevue Group is itself an owner-run company with the majority of shares held by employees.
- The fund invests in equities. Equities are subject to price fluctuations and so are also exposed to the risk of price losses.
- Shares in smaller businesses are generally traded in lower volumes and are subject to bigger price fluctuations than larger enterprises.
- The fund invests in foreign currencies, which means a corresponding degree of currency risk against the reference currency.
- The fund may invest a proportion of its assets in financial instruments that might under certain circumstances have a relatively low level of liquidity, which can in turn affect the fund’s liquidity.
- The fund may engage in derivatives transactions. The increased opportunities gained come with an increased risk of losses.
Review / Outlook
European small and mid caps, as measured by the MSCI Europe Small Cap ex-UK, reverted trend rising 9.2% in July underpinned by the increasing perception that the Fed hawkishness may have reached its peak while economic momentum is weakening. Acknowledging the very high inflation, the ECB finally decided to hike rates by a larger than expected 50 bps first move. It also announced the new Transmission Protection Instrument, an unlimited tool in size designed to control peripheral spreads. The US Fed raised rates by 75 bps in line with expectations but adopted a more cautious tone regarding future increases above the neutral level. US treasuries fell back below 2.7% while the German Bund yield nearly halved in the month to 0.8%. The flash EZ Composite PMI declined to 49.4 (June 52.0) as an accelerating downturn in manufacturing output (46.1 vs 49.3 in June) was accompanied by a near-stalling of services (50.6 vs 53). Nordstream 1 restarted but gas flow remains low compared to historical levels and highly dependent on the unpredictable geopolitical situation. In term of sector, industrials (+13.3%), information technology (12.2%) and real estate (+11.5%) performed best while financials (+2.0%), communication services (+3.2%) and consumer staples (+5.3%) lagged the most.
Against this backdrop, the fund increased 5.7% (EUR / B shares), a 346 bps under-performance versus its benchmark.
Main detractors in the month were Bankinter (-19.3%), Polypeptide (-39.5%) and Arjo (-11.3%). After a very strong ytd share price performance, the Spanish Bankinter suffered from the unexpected decision by the Spanish government to impose an exceptional tax on “excess” earnings generated by banks, considered beneficiaries of the higher interest rates. While negative, the impact has been estimated at a low percentage of the sector market cap given the temporary nature of the tax, and the share price reaction looks overdone to us. Polypeptide hugely disappointed. While H1 sales are set to remain roughly at prior-year level, EBITDA margin falls from 32% to 20% due to higher input costs, implying a 30 to 40% reduction in consensus expectations. Given limited visibility on future sales growth and margin progression as well as high valuation, we have chosen to realize the losses and exit the position. Arjo, the Swedish manufacturer of medical equipment, released disappointing Q2 results missing estimates as profitability was held back by weak organic growth as well as higher materials and logistic costs. Healthy order intake in profitable areas such as patient handling and DVT suggest a better H2.
Top performers in the month were U-Blox (+19.9%), Alten (+26.8%) and Nexans (+26.6%). U-Blox, the Swiss specialist of IoT chips and modules, was top 3 for a 3rd month in a row after having raised 2022 guidance in May. Still trading 50% below its 2018 peak, we continue to see significant potential upside to its share price. Growth momentum seems firmly underpinned by positive IoT trends in both the industrial and auto segments – as recently highlighted by Qualcomm – as well as trending own design wins. Alten, the French leading R&D outsourcing group, released Q2 revenues above expectations marked by very strong organic growth of 19%, with demand remaining strong across its well diversified end markets. No sign of slow-down has been noticed which led Alten management to commit for H2 growth well above 10%. Nexans, the French cable manufacturer, delivered strong H1 results marked notably by an EBITDA up 39% yoy and 18% above consensus expectations driven mainly by the usages (building) segment which benefited from very good pricing and solid volumes. Along cyclical momentum, the company also experiences strong structural growth as seen in its electrification business.
The hefty interest rate movements prompted the great return of growth versus value and underline the importance of a diversified portfolio. After this swift rebound it is difficult to feel confident about further market strength but sector and style rotations may continue. We exited the rest of our Ceconomy position after the profit warning. Taking advantage of the cheap valuation we increased positions in Swissquote and Cargotec after the good results. We also bought into BE Semiconductor and Majorel.
Past performance is not a reliable indicator of future results and can be misleading. As the sub-fund is denominated in a currency that may differ than an investor’s base currency, changes in the rate of exchange may have an adverse effect on prices and incomes. Performance is shown net of fees and expenses for the relevant share class over the reference period. All performance figures reflect the reinvestment of dividends and do not take into account the commissions and costs incurred on the issue and redemption of shares, if any. Individual costs are not taken into account and would have a negative impact on the performance. With an investment amount of EUR 1,000 over an investment period of five years, the investment result in the first year would be reduced by the front-end load of up to EUR 50 (5%) as well as by additional individual custody charges. In subsequent years, the investment result would also be reduced by the individual custody account costs incurred. The reference benchmark of this class is used for performance comparison purposes only (dividend reinvested). No benchmark is directly identical to a sub-fund, thus the performance of a benchmark is not a reliable indicator of future performance of the sub-fund it is compared to. There can be no assurance that a return will be achieved or that a substantial loss of capital will not be incurred. All figures in base currency in %, calculated by the total return / BVI method.Show moreShow less