A new sub-fund today joins the Luxembourg-domiciled umbrella fund, Sparinvest SICAV. Originally named Atrium Value Partner SICAV European Small Cap, the fund was established in June 2006 by Atrium Asset Management (the small Danish value specialist acquired by Sparinvest in March 2011). The fund was the European carve-out of a considerably larger EUR 44 million Danish fund managed according to the same strategy. Now re-named Sparinvest European Small Cap Value, the fund retains its ISIN code (ISIN LU0256591552) and management team, Karsten Løngaard and Lisbeth Søgaard Nielsen who continue to jointly manage the ‘new’ fund as part of Sparinvest’s 10-strong Value Equities team. The fund enters the SICAV with a 5-year track record.
Whilst Sparinvest is a long term investment specialist with no belief in ‘market timing’ it nevertheless believes that the prospects for this fund at this time are excellent because of recent heavy selling trends in European Stock markets.
“We’re calling it the ‘zip-code Europe bargain bonanza’,” says Jens Moestrup Rasmussen, Head of the Sparinvest Value Equities team. “With the Euro-zone macro worries dominating the headlines every day, investors are suddenly treating any company with a European postcode as though it’s in terminal decline. Across the board, European equities are priced as though all companies had suddenly had 30% of their earnings power wiped out forever. There are genuine bargains out there, especially in the small cap sector, and we’re busy snapping them up as and when investors regain their risk appetites.”
For Jan Stig Rasmussen, Managing Director of Sparinvest in Luxembourg, the launch of Sparinvest’s fifth value equities sub-fund is meaningful in a wider industry context because it demonstrates how companies that run a tight ship can make strategic acquisitions during times of economic crisis.
“We have been delighted to welcome Karsten Løngaard and Lisbeth Søgaard Nielsen into our value equities team. Their integration into Sparinvest has been quick and seamless, because they share our value investment philosophy. Thus in acquiring Atrium in March, Sparinvest has bought relevant expertise, reduced domestic competition and added to assets under management. We could not have achieved any of this if we had not been as prudent in running our business as we are in investing money.”
Sparinvest European Small Cap Value fund invests for positive long term returns using Sparinvest’s 100% bottom up value equities strategy to discover value investment opportunities arising in the small and micro cap (as defined by MSCI) segment of the equity markets of EU member states plus Norway and Switzerland. The fund seeks to
buy shares in companies offering the following features:
Easy to understand business models and financial statements
Ability to generate stable cash flow and returns on invested capital
Financially strong balance sheets
Trading at a minimum share-price-to-intrinsic-value discount of 40%.
Portfolio Characteristics at Launch:
ISIN code : LU0256591552 R
Launch Date: 22nd June 2006
Size : EUR 3.31m
Subscription fee : 3 %
Top 5 holdings: Aareal Bank AG : 6,1 %, Wash Tec AG : 5,3 %, Wolford AG : 4,8 %, Derby Cycle AG : 4,8 %, Haldex Group AB : 4,6 %
Geographical split : Euro Countries : 74,2 %, Non-Euro Countries : 25,5 %, Eastern Europe, Emerging : 0 %
Top 3 sectors : Consumer Goods : 32,5 %, Industrial Materials : 27,5 %, Business Services : 10,3 %
