Juno Selection Fund: Q2 2016
Juno Selection Fund looks back on volatile first half of 2016, but remains positive about the future.
- Two new investments in family-owned companies added to portfolio
- Portfolio companies continue their excellent operational performance
- Total return since inception of +180% well ahead of market indices and peers
Wassenaar – July 28, 2016 – The Juno Selection Fund, specialized in investing in European small and mid-cap (family-owned) companies, showed negative performance of 7% during the first six months of the year, after it returned 33% in 2015. The fund stayed ahead of the European index during the first half of the year, which lost 10.8%. Considering the positive developments at the portfolio companies in the Juno Selection Fund, we are confident about the future. Moreover, Citywire, who analyzes and rates fund managers, lists the Juno Selection Fund as the best of 222 funds that invest in European small and mid-caps*.
The second quarter ended positively with +3.1% and could thereby somewhat compensate for the mediocre start of the first three months of 2016. Total return since inception of the fund now stands at +180%. On an annual basis, this implies a compound annual rate of +12.9% per annum. These are clearly superior results to what one could have realized elsewhere on the equity markets. Since January 2008, the Dutch AEX, including reinvested dividends, has returned no more than +2.0% per annum. The European small and mid-cap equity index achieved an annual return of +3.5% over the same 8.5 years. In spite of the declining net asset value following this year’s negative performance, assets under management have increased to €132.4 million.
• Return H1 2016: -7.0%
• Return Q1 2016: -9.8%
• Return Q2 2016: +3.1%
• CAGR over past five years: +15.6%
• Assets under management in the fund: 132.4 million Euros***
Two Italian companies added to Juno Selection Fund
One of the new additions to the Juno Selection Fund portfolio is the Italian company Salvatore Ferragamo, producer of shoes, leather goods and accessories in the luxury goods segment, which it supplies to 270 multi label retailers and department stores and sells via 390 proprietary shops in prime locations worldwide. Additionally, Juno has invested in another Italian, family-owned company Brembo. Brembo produces brake systems for cars and motorcycles and is supplier to almost all the premium cars such as Ferrari, Porsche and Lamborghini, and also 20 of the 22 Formula 1 cars.
Frans Jurgens, managing partner and co-founder of Juno: “During the past half year, we saw a substantial inflow of new capital into the fund. The decline of the share prices triggered many of our clients to further increase their investment in Juno. One third of the total inflow of capital into the fund this year, came from follow-on investments from existing clients”.
Lennart Smits, managing partner and co-founder of Juno: “For 2016, we expect our companies to once again perform within our objective bandwidth of 10-15% earnings growth. The price we pay for this earnings (growth) remains attractive, especially considering the low interest rate.”
* Euromoney Smaller Companies Index
** For Citywire review, click here
*** Juno Investment Partners manages assets in excess of 200 million Euros in this strategy, divided over the Juno Selection Fund as well as separate accounts of institutional clients.
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.
