Juno Continuation Fund: Q3 2020
Despite Corona, portfolio companies manage to maintain the trend of rising earnings and turnover
Juno Continuation Fund manages to maintain positive trend and records +7.8% performance this year
- Juno Continuation Fund achieves positive result in third quarter (7.1%).
- 2020 Return (since inception on February 1) now stands at 7.8%
- MSCI MidCap Index shows -7.8% over same time frame.
- Portfolio adjustment early in the year was prompted by desire for higher predictability.
- A weighted growth of at least 9% in the portfolio companies’ earnings is expected for the full year 2020.
DThe Hague – October 16, 2020
Rob Deneke, manager of the Juno Continuation Fund: “As a long-term investor, we have an eye for long-term trends. These, unlike short-term noise, often have a significant impact on industry and specific company developments. In addition to the long-term horizon, we value a high degree of predictability. With this predictability in mind, we looked at the impact of the corona pandemic at the beginning of this year and adjusted our portfolio where necessary. We had to part with some positions and others saw their portfolio weight increased. That seems to pay off. The companies in the portfolio again show a good development in turnover and earnings this year. ”
“There are still interesting companies to add to our portfolio, but we feel many are too expensive at the moment.”
Duncan Siewe, manager of the Juno Continuation Fund: “Companies with business models that function poorly in these corona times have disappeared from our portfolio. Although we prefer to make few changes to our portfolio, the enormous impact of the pandemic made this necessary. The remaining companies in the portfolio are developing well operationally and this is reflected in their share prices. We are currently holding a fairly large cash position of more than 20% out of caution and discipline. There are still interesting companies to add to our portfolio, but we feel many are too expensive at the moment. The cash position ensures that we can wait comfortably. Moreover, it is encouraging that the attractive performance to date has been achieved despite these high cash balances in the fund. ”
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.
