Portfolio Manager comment Coeli Global Select September 2019
September was an intense month for us with many company meetings across the globe, everywhere from New York to Istanbul and Paris, but also with quite a number of corporate events for our portfolio companies. Over the course of the month the fund was up by 0.9 percent, which was some 2 percent worse than the benchmark. The chief explanation for the fund’s reversals lay in two stocks: a dismal performance by the German real estate firm Aroundtown, and an ongoing poor development by the Indian bank Yes Bank. On the positive front, our cyclical holdings United Rentals, Sandvik and Siltronic were strong.
Key market events and trends affecting performance
During August, we had seen many signs suggesting the market was in for a better autumn in regards to capital goods shares and we had invested in Sandvik to take advantage of this upswing. However, at the start of September we saw that both we and the market had got it wrong and so we decided to take out our small but decent profit in Sandvik. Data from the beginning of October signals that capital goods are headed deeper into a downturn, making us very happy to have been able to sell Sandvik before the stock started to drop.
During September we said “thank you for the ride” to GMS, one of our special situations stocks, and sold it off after a rise of well over 50 percent since the year-to-date. The acquisition of the payment company TSS (Total System Services) was concluded during the month and so we sold and replaced it with an investment in the Brazilian payment firm Pagseguro, a company we have been monitoring for several months. We have not only had contact with Pagseguro but also with its competitor, Stone.
Closer to home, the largest shareholder in the German real estate firm Aroundtown suddenly sold off their shares. Our investment strategy in this company has always been to sell when this shareholder does, since no one knows the company better. Over three years we have almost doubled our investment in this stock and always knew that one day we would have to sell. That day has come. We reinvested the money from this sale in the Australian real estate company Dexus, which owns the very best office premises, in Sydney in particular. Besides owning the best properties, the company has also a very low loan-to-value, pays out high dividends, and the share is trending upwards since the Australian base rate is sharply decreasing.
The fund’s positioning
After having more cyclical risk over the summer, we have now repositioned the fund for more defensive secular growth. With our companies up for reporting in a few weeks it seems like we have a great reporting season ahead of us, which we are excited about.
Coeli Global Select I-EUR
|Performance in Share Class Currency||1 Mth||YTD||3 yrs*||Since incep*|
|Coeli Global Select – I EUR||0.93%||20.49%||36.82%||62.23%|
* the historic performance before 2018 06 30 is an estimated performance based on the R EUR share class adjusted for
the different Investment Management fee It shall be noted that the adjusted historical performance can differ from the real
outcome and therefore shall only be seen as an indicator.
DISCLAIMER. The information provided here does not constitute professional financial advice. Past performance is not a guarantee of future returns. The price of the investment may go up or down and an investor may not get back the amount originally invested. The key investor information document (KIID) and prospectus are available at www.coeli.se.