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: 24.06.2022)
NAV: EUR 314.47 (22.06.2022)
Rolling performance (22.06.2022)
|22.06.2021 - 22.06.2022||-20.78%||-14.83%|
|22.06.2020 - 22.06.2021||41.45%||43.72%|
|21.06.2019 - 22.06.2020||4.61%||-0.02%|
|22.06.2018 - 21.06.2019||-17.51%||-5.50%|
Annualized performance (22.06.2022)
|Since Inception p.a.||8.76%||9.97%|
Cumulative performance (22.06.2022)
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)||2.19% (31.05.2022)|
|Legal form||SICAV Luxembourg jurisdiction|
|SFDR category||Article 8|
Key data (31.05.2022, base currency EUR)
|No. of positions||49|
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
Small and mid caps, as measured by the MSCI Europe Small Cap ex-UK, lost 1.3% in May, with the topics of inflation, China lockdowns and geopolitics still prevailing. Inflation in the EZ increased sequentially to new records, pushing government bond yields further up. Most central banks have either continued to tighten (Fed, BOE) or have signalled their willingness to do so (ECB). So far the scenario of an imminent recession is not supported by economic data. In the US, retail sales and industrial production surprised positively, while in the Eurozone consumer confidence fell while business surveys remained on healthy levels. Flash EZ Composite PMI declined slightly to 54.9 in May from 55.8 in April, with services still reporting strong growth from pent-up pandemic demand, while manufacturing output only saw a modest expansion. In term of sector, energy (+8.6%), financials (+1.7%) and healthcare (+0.3%) performed best while real estate (-3.9%), consumer staples (-3.6%) and industrials (-2.0%) lagged the most.
Against this backdrop, the fund declined 2.2% (EUR / B shares), 96 bps below its benchmark.
Top detractors in the month were Swissquote (-25.4%), Cloetta (-14.5%) and Melia (-6.6%). Swissquote was under pressure in anticipation of weaker trading commission related to equities and cryptos. Cloetta announced a substantial investment plan over the coming 4 years in a new greenfield production facility in the Netherlands. The project has clear benefits as it will improve the group’s ESG credentials and lead to significant cost savings. However, cost savings are very back-end starting 2026 only. Melia’s Q1 missed expectations by 15% at EBITDA level, which led to some profit taking after a strong 30% performance ytd. Q1 figures have little relevance however, as it is a seasonally weak quarter and was moreover impacted by Omicron.
Top performers in the month were Subsea7 (+22.2%), BFF Bank (+21.9%) and U-Blox (+10.7%). Given the recovery in energy prices, new project tenders are increasing for Subsea7 – both for conventional subsea work and for offshore wind, as shown by the recent win of the Buzios 8 field in Brazil, a major contract representing more than 10% of its backlog. The company has material operational gearing and higher revenue should enable stronger margins over time as pricing improves and fleet utilization picks up. BFF reported a strong set of Q1 results marked by an adj. net profit 9% above expectations. Among the positives was the return to growth of the lending book with factoring volumes up 42%, a division which should continue to benefit from higher political and country risk. The Swiss semi and module specialist U-Blox raised its 2022 guidance on the back of persisting strong demand, rapid conversion of its large backlog and operating leverage. We see great upside still as consensus remains very skeptical. Valuation multiples are very attractive at ca. 6.5x EBIT2023.
Following the war on Ukraine market dislocations have been massive. In Europe, the sectors of energy and basic materials have shot up overnight, while tech or retail have lost 25 to 30%. The European Stoxx 600 is only down 8% ytd but this hides great discrepancies.
Overall, inflation remains the topic. From being negligible, then higher but transitory, inflation has quickly reached levels not seen since the 80s. While energy prices, raw materials or shipping costs are likely to normalize at some point, we also see factors, such as reshoring or the increased need for renewables likely to impact in the longterm. If sequentially we could be close to peak inflation, there are reasons to believe the new normal is higher for longer. In this context we favor companies with strong pricing power, high margin, little Capex needs and strong balance sheet. Valuations matter. The bubble hast burst in high growth stocks with corrections of 50-60%, cyclicals both industrials and consumers trade at historic depressed valuations and small and mid caps have underperformed offering selectively attractive entry levels.
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