In November, the fund achieved a performance of +10.17% (+10.95% gross). The average net exposure was 110.37%. The long side contributed +11.15% (gross), while the short side cost -0.20% (gross).
Market Review:
- Indices: DAX +0.8%, MDAX -2.7%, SMI -2.8%, TecDax +0.4%, SDAX -2.7%, Russell 2000 +8.75%
- Currencies: Euro vs. CHF -0.89% (CHF 0.93), Euro vs. USD -2.8% (USD 1.06), Bitcoin +40% (USD 96,747)
- Commodities: Brent Oil -2.6% (USD 72.03), WTI -3.4% (USD 68.03)
Market Drivers:
The U.S. presidential election triggered a rally that pushed the S&P to a new all-time high. In line with “Trump trades,” Bitcoin also surged 40%, nearly reaching USD 100,000 after Trump advocated for Bitcoin as a national reserve. He also announced potential tariffs on goods from Mexico, Canada, and China. Meanwhile, Jerome Powell indicated labor market and inflation normalization, the Fed minutes revealed skepticism about further rate cuts, given strong economic growth and consumer spending.
Portfolio Review:
Real Estate: Real estate stocks remained under pressure due to the interest rate environment, although the correlation between German real estate and U.S. interest rates seems misplaced. We observe a false correlation here. Recent Purchases: TeamViewer: Lost 13.06%, likely due to conservative revenue guidance linked to weak IT demand in Germany. Despite this, profitability improved to 48% in Q3 (+4 percentage points). However, revenue momentum is still lacking, requiring patience. The upcoming political shifts in Germany might drive new investment incentives. Evotec: Gained 24.54% (EUR 8.83) after receiving a takeover offer from Halozyme (bid: EUR 11.00). Halozyme withdrew its bid after 8 days due to a lack of interest from Evotec. Evotec remains optimistic about its business prospects and focused on profitable growth. Triton had recently built a nearly 10% stake in Evotec. Kuros: The Dutch-Swiss bone implant company has performed exceptionally this year. Management and industry experts expressed confidence in the strong demand for their MagnetOs product, which accelerates bone growth. Capacity has doubled, and U.S. operations are expanding from spinal to extremity markets, leveraging existing hospital relationships. The addressable market is valued at USD 1 billion. “Trump Trade”: With the flexibility to allocate up to 25% outside Europe, we invested in carefully analyzed growth stocks in digital currencies, particularly around Bitcoin, following Trump’s election. His administration’s strategic focus on Bitcoin presents substantial opportunities. Despite this opportunistic allocation, the fund’s long-term strategy remains centered on the European equities market.
Investment Decisions:
We opportunistically increased long exposure this month and slightly reduced positions in real estate stocks. Additionally, we sold our position in Aixtron after meeting with management and assessing the mid-term outlook as less dynamic.
Outlook:
This year has demonstrated the challenges of generating returns with small and mid-caps in Europe, emphasizing the need to actively seek opportunities and think beyond traditional markets. The election of Trump as U.S. President and the upcoming re-election in Germany signal a new market dynamic, presenting significant opportunities, especially for the European economy.
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