HORNET INFRASTRUCTURE WATER FUND (EUR)

Transcription

1 HORNET INFRASTRUCTURE WATER FUND (EUR)

2 Investment Case Key Messages Why GN Invest AG as asset manager & AC Partners AG as investment advisor? Outperformance of «Hornet Infrastructure Water Fund» over 3 years versus «ishares Global Infrastructure Index» also due to a disciplined investment process Experienced and specialised investment team with a long term track record and a global sector research platform Transparent and active portfolio construction with listed infrastructure equities Why to invest in the Water infrastructure sector? Low volatility asset class with low correlation to equity markets (0.23 versus MSCI World) Above average grow potential Real asset class with long duration assets Why to invest in a mutual fund? The fund is regulated by the finnancial market autority Invest globally at low cost One transaction leads to a long term successful investment

3 Investment Case Water Environment 800mn humans worldwide without clean drinking water 2.5bn humans have no access to sanitation OECD estimates world population will grow to 9bn people in kg beef production takes l / 1 kg wheat needs only 1 500l virtual water Performance Drivers Top Down 6 7% CAGR* Population growth / «virtual water» / quality improvement / water shortage Investments Stable cashflows and solid investment returns / high dividend yields Agricultural use / water distribution / urbanisation Industrialisation: energy / chemical industry, electronic industry, metal mines Water sector grows faster than worldwide GDP & MSCI equity indices SRI / Social Responsability Investment / «Social Value» Total market capitalisation only at approx. EUR bn Source: BofA/ML / OECD / AC Partners AG Bottom Up «Pricing power» / inflation protection on invested capital Regulated capital return & -costs «Public Private Partnerships» & privatisation of Infrastructure assets * constant average growth rate in % (CAGR %)

4 Value Chain Water Utility / Infrastructure Operational water utilities / assets Water energy / hydropower assets Environment & Service Water treatment & service companies Waste & sewerage management Installation and construction companies / desalination plants Technology / Equipment Infrastructure equipment companies in the field of irrigation, pumps, pipes, valves, filters or meters etc. Increased demand (OECD) from 2000 to 2050 Increased demand Industry/Electronic +406% Energy/Electricity +144% Household +127% Livestock +63% Irrigation/Agriculture -14% Current consumption Agricultural economy 70 % Industrial sector 22 % Private consumption 8 %

5 Investment Structure Value Chain The Investor subscribes into the fund Hornet Infrastructure Water Fund (EUR) Investments in Water infrastructure are compliant to European (UCITS IV) law and fund rules Utility / Infrastructure Environment / Service Technology / Equipment Fund administration IFM, Vaduz Depositary Bank / Liechtensteinische Landesbank, Vaduz Treasures assets in fund account Asset Manager GN Invest AG, Vaduz Investment strategy and asset management Investment controlling Set up rules of fund / net asset value calculation (NAV) / monitoring asset manager / investment advisor Regulation FMA / Financial Market Authority Regulates und supervises asset manager & investment fund Investment Advisor AC Partners AG, Zug/Baar Investment analysis & valuation

6 At a glance Hornet Infrastructure Water Fund (EUR) Investment style The investment aim of the Hornet Infrastructure - Water Fund is to achieve long-term capital appreciation with lower volatility compared to equity markets. The investment strategy pursues an active, value-oriented investment style without tracking a benchmark. The fund invests worldwide in infrastructure companies with stable cash flows. The fund is a "long only" structure and continually realizes and secures capital gains. The currency exposure is actively managed. Investment focus The fund invests its assets solely in equity of companies which are active in the infrastructure sector, such as water utilities, transportation, communication and social infrastructure facilities. The focus is on operational, regulated water utilities, which own the facilities and for example treat and distribute drinking water regionally or which are active in energy production (hydro power) or water technology as well as in water environment & service. Fund details Net Asset Value (NAV) Fund volume / shares Security number / ISIN Fund domicile Asset manager Investment advisor Depositary bank Administration Revision Launch / Start Fund structure / Sales Management fee Depositary bank / Admin. fee Distribution Subscriptions / Redemptions Issue / Redemption price 30th August 2018 EUR EUR 27'040'522 / 29' / LI Liechtenstein GN Invest AG, FL-9490 Vaduz AC Partners AG, CH-6340 Baar LLB Liechtensteinische Landesbank AG, FL-Vaduz IFM Independent Fund Management AG, FL-Vaduz Ernst & Young AG, CH-3001 Bern 11th October 2007 OGAW / UCITS IV 1.5% p.a. 0.15% p.a. / % p.a. none (dividends are reinvested) weekly, each Thursday (16:00 CET) Asset value per share (NAV + / - any commissions) Largest equity positions Suez Guangdong Invest Rg SABESP Sp ADR American Sts Wat Rg American Water Works Aqua America Rg ACEA N Pennon Grp Rg Novors Sp GDR Reg-S Hera Spa Performance in % YTD year 2 years 3 years 5 years C y a Hornet Infrastructure - Water -5.48% -5.76% -1.87% 9.17% 25.63% Sector allocation Source: IFM / MSCI / Telekurs (fund performance cum. after administrative costs s resp. net) Risk figures YTD year 2 years 3 years ince 2007 Volatility p.a. 7.83% 6.89% 7.63% 9.47% 9.19% Correlation vs. MSCI World Risk profile Recommended d investment horizon moderate e medium high 3 years 5 years 7 years P Price performance in EUR / NAV Country allocation GN Invest AG Tel info@gninvest.com AC Partners AG Tel info@ac-partners.ch

7 Review Hornet Infrastructure Water Fund (EUR) General market review The stock markets are currently burdened by enormous divergences. While the EuroStoxx50 had a 4-5% fluctuation in August and was clearly negative, indices in the USA rose to new record highs. The index momentum in the US equity market is mainly pushed by the IT sector, which is driven in particular by passive index strategies (must) buying large cap companies regardless of the valuation level. On the other hand, the emerging markets are shunned by political uncertainties and falling currencies. This is partially justified, as the example of Turkey shows. In structurally better-off countries, we believe the political risks are currently over-weighted. Investment Portfolio In August, the Hornet Infrastructure - Water Funds (EUR) NAV drops to EUR , reflecting the current high volatility in the emerging markets as well as the major performance divergences across sectors. At the stock level, China EB Int. in China, which suffered a -28.7% price decline after a surprise capital increase, contributed negatively to the performance, as did the positions in Italy Acea -7.5% and Hera -4.5%. In contrast, Suez +3.8% in France and our water utilities in the UK gained around +5% despite unresolved "Brexit" discussions. As far as the currency situation in the emerging markets is concerned, we note that countries with at least partly privatised infrastructure investments are relatively less affected by structural risks. Market review Infrastructure By mid-august, the cyclical transport subsector has been positive, especially in the US. After that, the entire sector was struggling with a lower USD. The interest rate curve has flattened further in the USA, reflecting a gloomier picture of the economy. However, as long as the global economy does not weaken as a result of an effective trade war, the more stable sectors, such as utilities, are being underweighted by the market. In many emerging markets, however, medium-term growth opportunities in infrastructure are underestimated and short-term risks overstated. This led to significant price declines, but also to high expected returns, which in the medium term might offset the risks compared to the developed markets. Do current market prices in China offer opportunities? While US-China trade disputes have weighed on equity markets over the last few months, a more detailed analysis of China's economic data shows a mixed picture: GDP growth was +6.7% in line with expectations and inflation was +2.1% below the government target of +3%. In contrast, the trade surplus in July was below expectations and the leading indicator PMI Industrie is showing less growth at For value-oriented investors, weaker market development offers attractive opportunities for entry into existing positions. Our quantitative chance-risk tool confirms, that there is exceptionally great potential for a recovery in individual Chinese stocks. GN Invest AG Tel info@gninvest.com AC Partners AG Tel info@ac-partners.ch This document has been forwarded to you upon request. It is for information purposes only and does not constitute an offer to acquire, any investment advice or recommendation and it is not an independent financial analysis. It does not replace any individual and professional advice from an investment advisor. The information has been compiled with care. However, no guarantee can be given for the correctness and completeness of the information. The prospectus as well as the annual report from the HORNET Infrastructure - Water Fund (EUR) are available for free at GN Invest AG, Vaduz or on the homepage of the IFM Independent Fund Management AG ( For a detailed risk explanation, please see our fund prospectus.