Verrazzano Concentrated Equity Europe
 Fund Aim

A Pan-European Equity Long Only fund that aims to deliver capital growth and outperform the MSCI Europe Index on a calendar year basis. The strategy adopts an unconstrained pragmatic stock picking approach based on fundamental financial analysis and a concentrated approach with thematic, sector, country diversification.

As of 30/09/2017, the fund is up +14.53% Year-to-Date (versus 9.55% for the MSCI Europe benchmark).

 Fund Overview

The objective of the Sub-Fund is to outperform its benchmark, the MSCI Daily Europe in EUR (net dividends reinvested) on an annual basis.
The Sub-Fund will aim at delivering capital growth by investing primarily in long-only listed equity securities issued by companies that are headquartered in Europe or conduct a preponderant part of their activities in Europe. The Sub-Fund may also invest in equity securities listed on major world exchanges that are outside of Europe, up to 20% of the total net assets of the Sub-Fund.

The Sub-Fund will perform a discretionary and active selection of listed companies. The Sub-Fund does not aim to replicate the benchmark, hence performance may deviate from the benchmark.
Selected shares will mainly consist in large market capitalisations over USD 2 billion. Lower size capitalisations, including small capitalisations may be targeted where there are

 Management Comment

European PMIs are booming (at its highest level since April 2011), especially in France. There is no shortage of data around trumpeting the (now highly consensual) EU recovery. Time to revisit the “Goldilock’s” backdrop cliché characterized by decent global growth and subdued inflation ? Market participants seem to have their cake and eat it too. The divergence of performance between US markets and EU (c10% underperformance for the latter) is still perhaps the most puzzling and long lasting debate (especially in the last quarter of this year) which we will eschew willingly.

Newcomers to the portfolio include Italian bank Banco BPM (2.9% position) which is basically a “NPL (non performing loan) de risking” story trading at a substantial discount to tangible book (0.4x) on the back of the recent ECB toughening stance on new NPLs, and BNP (3%) which continues to deliver on capital generation despite recent earnings disappointment. We have recycled our ALD position into Johnson Matthey (2.5%), a UK specialty chemicals company which is at the beginning of a transition journey from auto catalysts to new generation cathode material for EV batteries, offering an interesting growth option. We have also added Intertrust (1.2%), a provider of trust and corporate services with 85% of its revenues non discretionary, operating in a growing and quite defensive segment of business services and trading at a low P/E and a 12% FCF yield.

We’ve exited Volkswagen as the recovery and cash flow story gained traction and closed our EDF positon which has been one of our top 3 performing positions in the fund year-to-date (+150bps). We have also decided to exit Spanish property developer Neinor and took our profits in Italian NPL related stock Eurocastle.

While there are omens out there for all momentum punters to reflect on, I came across this anecdote, dated 1637. At the height of the tulip bulb craze, an owner of a rare bulb turned down an offer for it that was twice the amount that Rembrandt would get for his masterpiece “The Night Watch” in 1642. Cryptocurrencies combined market cap has reached a staggering 280Bn$, the equivalent of L’Oréal + LVMH + Danone…and there are 13mn accounts trading in digital “currencies”. Bubblicious indeed !

“Bull markets do not die of old age” as the saying goes, but what kills it can be a totally innocuous event. We prefer John Kenneth Galbraith’s quote: “We have two classes of forecasters: those who don’t know and those who don’t know they don’t know”.

Stay tuned.

Thank you for your continued partnership,

Best regards,

Youssef Benhaddouch
December 6th, 2017


 NAV Chart
 Shareclass Information
ClassClass TypeInception dateISINBloombergManagement FeePerformance Fee* **Passported
EI EURAccumulation15/12/16LU1517200215VECEEIE LX0.60%15%UK, FR
C EURAccumulation15/12/16LU1517198211VECECEC LX0.80%15%UK, FR

* The net profit over the semiannual calculation periods with high water mark

**Net profit versus the benchmark.

 This table was established by Verrazzano Capital which is the UCITS management company for the Verrazzano SICAV. Although best efforts were made in gathering data and designing the table, Verrazzano Capital and the Verrazzano SICAV do not make any representation as to the accuracy and completeness of its content. This table may be subject to frequent updates and therefore may not be fully updated at this moment in time. It is your responsibility to ensure that the version you are using is the most up-to-date. There are numerous risks associated with equity investing, including but not limited to liquidity risk, currency risk and market risk. All risks should be carefully understood and considered before making any investment. All relevant details are available in the related prospectus and Kiids which are available on this website. The information on this website should not be construed as an investment advice. Past performance is not indicative of future results. .
Launch date
Portfolio manager

Youssef Benhaddouch

Fund reference currency
Fund domicile
Fund legal structure
Management company
Verrazzano Capital SAS