Juno Continuation Fund: Q1 2020
Juno Continuation Fund – A Remarkable Start
The Hague – April 2020 – On 1 February this year, the Juno Continuation Fund was launched. This new fund, managed by Juno Investment Partners, will apply the successful investment style of the Juno Selection Fund, which closed for investors in 2018. The Continuation fund is identical in almost all respects to the Selection fund, but focuses on investments in European (family-owned) companies that are one size up compared to the Selection Fund. Juno is delighted and proud to announce that the Fund had over 80 participants at launch date and that this number has been steadily increasing since.
Since its launch date, the Juno Continuation Fund did suffer from the effects of the COVID-19 virus as well and ended the first quarter of 2020 with a net asset value of €87.80 per participation, a decrease of -12.2% since the start of the fund on February 1. Over this period, the MSCI Europe Mid Cap Index lost -24.7% and the AEX (dividend reinvested) also fell sharply by -18.1%.
The pandemic that is currently gripping the world also affects some of the companies selected by Juno. Rob Deneke, director and co-manager of the Juno Continuation Fund: “Although affected by current developments, it is clear that the capability to withstand the current situation is above average for the majority of our companies. The products and services they provide are often essential for their customers, as a result of which the demand for these products and services often continues. In addition, our companies are financed conservatively so that their survival is not in jeopardy and they remain able to make the necessary investments, usually from their own resources, as and when necessary”.
“It is especially the low dependency on economic cycles, a core selection criterion at Juno, that makes our companies less vulnerable.”
Frans Jurgens, director and co-founder of Juno: “It is not our expertise to make macroeconomic forecasts, but we strongly believe that once this pandemic is behind us, it will leave a very deep scar in the economy. Fortunately, there are also companies that are barely affected and even a few that will take advantage of the current circumstances. We were able to act on share price weakness and selectively increase the holding of those companies in our portfolio”.
Lennart Smits, director and co-founder of Juno: “The timing of the launch of the Juno Continuation Fund meant that the Fund had a fairly high cash position of around 30%, which has certainly helped us over the past period. But especially the low dependency on economic cycles, a core selection criterion at Juno, makes our companies less vulnerable. We also benefited from the healthy financial structures of our companies: where cash on the balance sheet still cost money a few months ago and caused derision from bankers, our (family-owned) companies now hold the trump cards. Juno will try to continue to make smart, selective and disciplined use of the high volatility in the markets to get the cash we hold in the portfolio today back to work”.
About Juno Investment Partners
Juno Investment Partners was established in 2007 as a fully independent fund manager and has an AIFM license (as referred to in Section 2:65 of the Wft), issued by the Dutch regulator AFM. Juno specializes in the selection of exceptional listed (family owned) companies in Europe. Companies that are able to achieve predictable and stable earnings growth year after year are considered for investment. The selection process focuses on the return on invested capital, a low debt ratio and free cash flows of a highly predictable nature. The analysts/portfolio managers compile a highly concentrated portfolio of approximately fifteen companies that they identify, analyze and visit regularly. Selected companies remain in the portfolio for a longer time period (usually more than five years). All analysts/portfolio managers have themselves invested in the Juno funds.
Juno offers three products: The Juno Selection Fund, which focuses on the selection of smaller and medium-sized listed companies, the Juno Continuation Fund for medium-sized companies and individual asset management using the same investment style, for larger clients through managed segregated accounts.
– The Juno Selection Fund was launched in 2008. This mutual fund invests in distinctive European small and medium-sized companies with an initial market capitalization of €250 million to €4 billion. In recent years, this investment style has resulted in above average investment returns for participants in the Juno Selection Fund. This fund has been hard closed for further (follow on) subscriptions since 2018.
– The same investment strategy is applied in the Juno Continuation Fund, which was launched on February 1, 2020. This fund focuses on unique, medium-sized European companies with a market value between €4 billion and €20 billion at the time of initial purchase. As is the case with the Selection Fund, the Continuation Fund also has a strong preference for investments in businesses that are family owned, or companies in which a family or management itself is also a shareholder.