Quarterly Report September 2023


in September




in 2023



Portfolio and market

The Antaurus Europe Fund (AEF) was up +1.5% in September. This brought the September closing price to €316.58. This puts the annual return in 2023 at 3.1%. From its inception in 2006, the average annual net return is +7.0%.

Returns were realized with an average net gain of 16% in September. This meant that the AEF's market risk was substantially lower than that of an equity investment.

Performance and risk since start

Antaurus Europe Fund (NAV)

Performance AEF (%)
1 month +1,52
3 months +3,06
Year to date +3,07
2022 -1,20
2021 +10,68
3 years (annualized) +6,38
5 years (annualized) +5,70
Since start (annualized) +7,01


Risk analysis 1 month 5 years Since start
Gross position (Long + Short in %) 135 134 132
Net long (Long - Short in %) 16 23 39
Beta adjusted net long (%) 16 22 35
Positive months (%) 57 61
Maximum drawdown (%) -8,8 -20,9
Best monthly return (%) 6,5 11,9
Worst monthly return (%) -3,4 -8,6
Volatility (%) 6,5 10,3
Sharpe ratio 0,88 0,68

Stock prices in Europe fell in the third quarter. The AEX and Euro Stoxx Index fell 5% and 4% respectively (including dividends). At the AEF, stock selection (alpha) had a positive contribution. Short positions in industrial companies contributed most positively.

The best performing equity positions were Accelleron (industrial), Also (distributor of technology) and short positions in Swedish industrial companies. The worst performing long position was GN Store Nord (consumer durables).

Short positions in Swedish industrial companies made the largest contribution to earnings. On average, the share prices of these companies fell 17%. After several years of solid growth, these companies are currently seeing a decline in new orders. Although profits are still up this year, the realization is landing that corporate profits will start to decline next year.

Accelleron's share price rose 11% in the third quarter of 2023. The company reported strong organic sales growth of 20% for the first six months, well above its previously communicated medium-term target of 2% to 4% sales growth per year. In addition, it was announced that the two largest shareholders in Accelleron, who had acquired their equity positions through the demerger of ABB last year, have reduced their investment in Accelleron. This left the last remaining larger ABB shareholders out of Accelleron's equity. The removal of selling pressure had a positive effect on the share price.

Also's share price rose 20%. Over the first half of the year, sales of the online platform that sells software subscriptions grew by as much as 66%. This strong revenue growth offset the decline in sales of hardware products such as computers, where demand is currently lower than in recent years. Also benefited from positive news reports regarding the implementation of artificial intelligence applications in software from Microsoft and Adobe. As one of the largest global distributors of these software packages, Also is well positioned to meet the growing demand for such software.

With a 17% share price loss, GN Store Nord contributed most negatively in the third quarter. A combination of worse-than-expected company figures and many organizational changes makes investors reluctant to enter at what we see as attractive share prices. As far as we are concerned, the company is taking the right steps and so we remain confident in this long position.

Investment Case: Sanoma

With a market capitalization of about €1 billion, Sanoma is a relatively small publicly traded company listed in Finland. Founded in 1889 as a traditional magazine, newspaper and book publisher, the company quickly gained a strong position within the Finnish media industry.

To adapt to a new reality where traditional media saw their strategic position in society deteriorate, Sanoma began a strategic shift towards educational solutions and digital learning resources for K12 education (education for 4-19 year olds) around the year 2000. This transition was based on the idea of applying its strengths, such as content creation and distribution, in the education domain.

Sanoma today consists of two independent business units: Media Finland (50% of sales, 35% of operating profit) and Learning (50% of sales, 65% of operating profit). Sanoma aims to achieve at least 75% of sales in Learning by 2030.

There are a number of aspects that are very appealing to us in Sanoma's Learning business: 1) higher growth potential; 2) limited cyclical sensitivity due to recurring revenue streams; 3) higher profit margins and 4) pricing power. In a highly fragmented education market with many local players struggling with the speed of the transition to digital education, we expect Sanoma to emerge as one of the market leaders.

Because Sanoma is the European market leader in K12 education and generates profits from its traditional Media business, Sanoma does have the resources to lead this transition. Subsequently, well-functioning platforms and applications in more digital education countries like the Netherlands and Finland can be transferred relatively easily to less digitally advanced countries in southern Europe.

Sanoma shares have been punished hard over the past year as investors began to doubt Sanoma's pricing power after Sanoma was hit hard by cost inflation in school year '22-23. This was due to the fact that Sanoma had already communicated its price list to its customers before the outbreak of war in Ukraine. Sanoma's costs increased from then on but this could not be passed on to customers. Moreover, schools as a rule work with set budgets so the implementation of necessary price increases is spread over several years - so in 2023 this will lead to margin pressure.

We believe that investors place too much value on these one-off circumstances and too little value on the company's medium-term prospects. The current valuation of less than ten times the estimated operating profit for 2024 is a valuation more befitting Sanoma's lower-quality media division. This shows that investors still see Sanoma too much as the old traditional media company and have not sufficiently appreciated the transition to a more innovative education company.

Strategy and outlook

European stock markets experienced a weak third quarter. Cyclical stocks in particular failed to perform. The oil and gas sector was a positive exception, benefiting from rising oil prices.

However, that higher oil price is negative for the European economy and is fueling inflation. This comes on top of already weakening data on the European economy. The Chinese economy is also currently weakening. Chinese consumers remain expectant after the Covid measures were lifted at the end of 2022. The reason is likely to be found in the well-known story of China's real estate market cooling down, thus negatively impacting household wealth and consumer confidence. In this regard, relatively high debt and skyrocketing youth unemployment also play a negative role. The weak demand from China was negative for (industrial) suppliers and European companies operating in that country.

Things are actually improving in the United States. The long-awaited recession remains out and expectations of economic growth in the third quarter strengthened sharply over the past three months. The Federal Reserve's GDPNow forecast anticipates as much as 4.9% growth in the third quarter (year-on-year), compared with no growth expected by economists in early July.

Monetary policy remains important. Today's higher interest rates mean that bonds are again an attractive alternative to stocks. The key question is whether this will continue. So much depends on central banks' interest rate decisions.

Inflation rates drive central banks and this is also a source of uncertainty. A certain current of investors remains convinced that the very low inflation as it was before the pandemic will return (inflation between 0% and 2%), another current thinks that inflation will remain high for a longer period of time (structurally between 2% to say 5%). This is difficult for all investors to assess as there is little guidance from historical data. Antaurus' current portfolio does not speculate on either of these two scenarios.

Broad-based European equity indices fell 4 percent last quarter, but sector-level results were larger. The combination of slightly rising interest rates and a weakening European economy had a dampening effect on European consumer and technology stocks, which fell an average of 10% to 15% last quarter. Financial services companies benefited from higher interest rates and this sector within the Eurostoxx index rose 5%.

Expectations for earnings growth from listed companies weakened somewhat last quarter, in line with the lackluster performance of the European economy. Our stance remains cautious for now, with net earnings weighting at 16%. However, we do see valuations of European small- and mid-cap stocks declining, meaning that risks are increasingly discounted in prices. For the AEF, this presents interesting opportunities.

Performance and risk since start

Top 3 positions Weight
Accelleron 9,78%
D'Ieteren 9,02%
Aryzta 7,31%
Industrials company 4,9%
Industrials company 4,7%
Real Estate company 4,7%

About Antaurus


NAV (€) €316,58
Fund size AuM (€m) 376
ISIN code EN 0000 686848


Maximum Gross 150%
Net long range -50% to +75%

Related parties

Depositary Caceis
Custodian Caceis
Administrator Bolder Fund Services
Auditor Mazars

Fund characteristics

Style Long/Short Equities
Geography Europe
Inception October 2006
Base currency Euro
Additions Monthly
Redemptions Monthly

Fee structure

Management Fee 1.8%, p.a.
Performance Fee 20%, quarterly
High Watermark Indefinite


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