Reason To Invest  

• The stocks we buy : Durable companies where we have a non-consensual thesis leading to valuation asymmetry on a 3 year view
   
• The portfolios we build : High conviction, focus on stock specific risk while avoiding unwanted factor exposure

We aim to build portfolios of European Small and Mid Caps that consistently outperform their benchmarks on a 3-year rolling basis, driven predominantly by stock selection rather than factor risks.

• Genuine, long-term active fund management with a good long-term record of market-beating returns*
   
• Robust investment approach with a strong focus on fundamental valuation
   
• Caring about what we pay for stocks has tended to give the fund a marked value tilt in recent years, BUT…
   
• …be open-minded: valuation anomalies may come in any sector
   
• “Bottom up” stock picking hand in hand with “top down” analysis: to do well in Europe, you need to do both
   
• Smaller companies are less well covered by sell side analysts
   
• Smaller companies require more in-house research by fund managers
   
• The result is a less efficient market with more alpha opportunities
   

Leveraging Regional Knowledge to build consistent portfolios

Digitalisation : “We have to push for investment and reform –and we have to strengthen our economies by focusing on our common priorities, like the European Green Deal, digitalisationand resilience,” –Von der Leyen,14th May 2020

Green Infrastructure investment : “The European Green Deal as the EU's recovery strategy: A massive renovation wave of our buildings and infrastructure and a more circular economy, bringing local jobs”

Innovation : “Executive Vice-President, Margrethe Vestager, said: “The coronavirus crisis has demonstrated how crucial it is for citizens and businesses to be connected and to be able to interact with each other online.”

Sustainability and Taxonomy : Sustainability matters in Small and Mid Caps. European taxonomy policies are aimed to reduce the cost of equity for cleanest technology and encourage change

Investing in a greener and smarter future

• Semiconductors : The end of Moore’s law and strong growing end markets (besides PC and Smart phones now also 5G, Automotive, IOT) drives a reduction in cyclicality of the sector and a need for innovation in new materials and new packaging methods 
   
• The digitalization of Corporate Europe : Smaller companies in Europe have been slow to transform theirbusinesses, Covid-19 hasbeen a wake-up call for many SME’s andSmaller corporates 
   
• Health-Tech : Although the overall healthcare system performed well in Europe during Covid-19, European policy makers recognize the increasing importance of accurate data and efficient healthcare delivery systems 
   
• “Europe First” in Tech? : Has Europe come to the conclusion that it cannot rely on US or Chinese tech providers for strategically important data and processes? 
   
• Digitalisation, umbrella for multiple investable themes : Unlike in the US and China, European tech is largely a small cap affair 

Green Infrastructure Investment

The EU Green deal is a true game changer

Climate change and environmental investment at never seen before scale : 

"Climate change is an existential threat to Europe and the world”. To overcome these challenges, Europe needs a new growth strategy that transforms the Union into a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases by 2050.

• Power - clean, affordable and secure energy: Renewables costs have fallen : 
  dramatically, having crossed over with thermal in many countries and are expected to fall further. Wind, solar, utility scale batteries and green hydrogen as solutions. 
   
• Transportation - accelerating the shift to sustainable & smart mobility: shift to low : 
  carbon fuel sources (e.g., electric vehicles, hydrogen fuel cells) 
   
• Infrastructure – building and renovating in an energy and resource efficient way : 
  Switch to low-carbon heating/cooling systems (e.g., solar thermal, hydrogen) and improve lighting and appliance resource efficiency 

Data as of 31/08/20

The enablers have been put in place many years ago, now it is time for Europe's entrepreneurs to deliver the next wave of world leading companies
 

• More than just Tech and Green Tech : We see innovation in Europe driving growth in many areas like Healthcare, Industry, Infrastructure and areas like food 
   
• IPO activity is increasing : We are seeing a sharp pick up in IPO activity driven by smaller fast-growing companies in a wide variety of sectors 
   
• The enablers that were put in place many years ago are finally showing results : Europe's strong educational institutions, large industrial base and supportive government infrastructure which had been put to work post Financial Crisis are starting to deliver results