INVESTMENT MANAGER'S REPORT
Results In the first half of 2017, return on equity was 16.4% (compared to the net asset value at the end of the prior financial year). The net asset value per share stood at 10.36 euros, against 8.91 euros on 31 December 2016. In these six months, Quest for Growth booked a result of 22.1 million euros (1.27 euros per ordinary share), compared with a loss (calculated according to IFRS) of 3.1 million euros (‐0.26 euros per share) in the first half of 2016.
The share price on 30 June 2017 was 8.04 euros, compared to 7.649 euros at the end of last year. On 30 June 2017, the share's list price was discounted at 22%, as against 14% on 31 December 2016.
Market environment In the second quarter, the stock markets saw little advancement in spite of a stream of positive economic indicators. Since the beginning of the year, the European exchanges (STOXX Europe 600 index) have risen exactly 5%. The return including dividends is 8%. Small caps performed better than the wide market: in the United States, the S&P 500 index rose by around 8%. Converted into euros, this rise is fully offset by a concomitant fall in the dollar. Investments in listed companies The portfolio of listed companies continued to perform well. Only Kiadis Pharma (down 35% in the first half‐year) was markedly out of line, having disappointed shareholders with a capital round that was not completely successful. No fewer than five of the portfolio's stocks rose by over 30%: Technotrans, Nexus, USU Software, TKH Group and UDG Healthcare. The estimated gross performance of the portfolio was over 15%.1
Three shares with market capitalisation of less than 1.5 billion euros were added to the portfolio: French companies Axway Software and Aures and the German company CEWE. As a result of the Zetes IPO, these shares were sold at 54.50 euros per share, compared with a price of under 29 euros upon initial purchase in May 2015.
Investments in unlisted companies Following the Avantium IPO in March, the shares are included in the portfolio with a lock‐up discount (of 13.5% on 30 June 2017). The valuations of Anteryon and Mapper have been adjusted, though the impact of the results is limited owing to the fact that the lion's share of the adjustments had already previously been taken up in "Adjustments in value of unlisted companies". Investments in venture capital funds The investments in venture capital funds made a significant contribution to the result in the first half‐year thanks to the sale of Ogeda to Astellas Pharma. Ogeda was part of the portfolio of Capricorn Health‐tech Fund, in which Quest for Growth has a holding. The deal successfully closed in May and the eventual contribution to Quest for Growth's profit is nearly 10 million euros. In July, Trinean, another Capricorn Health‐tech Fund portfolio company, was sold without any significant impact on Quest for Growth's results. Change in structure and IFRS The shareholders decided in extraordinary general meeting on 25 April 2017 to incorporate the option of declaring an interim dividend into the articles of association. Capricorn Venture Partners was appointed as the management company of Quest for Growth. In addition, the management company's fee was fixed at 1% of the share capital (this currently corresponds to a fee of 337,827 euros per quarter) from the second quarter of 2017. In accordance with the new PRIVAK/PRICAF legislation (Royal Decree of 10 July 2016), these results are presented in accordance with the IFRS rules. Prospects Improving economic indicators offer a picture of hope for the development of the economy. The higher prices do make it more difficult to seek out listed companies with an interesting valuation, however. The results from the first half‐year confirm the positive outlook that had previously been voiced for the 2017 results of companies in the unlisted portfolio.FINANCIAL ASSETS BREAKDOWN AT 30 JUNE 2017
Shares quoted companies
FINANCIAL ASSETS BREAKDOWN JUNE 30TH 2017 Shares quoted companies | Quest for Growth | ||||||
Company | Sector / Market | Number of shares | Change since 31/12/2016 | Currency | Share price | Valuation in € | in % of Net Asset Value |
Software & Services | |||||||
AXWAY SOFTWARE | Euronext Paris | 81,562 | 81,562 | € | 30.5000 | 2,487,641 | 1.58% |
BERTRANDT | Deutsche Börse | 29,000 | -5,000 | € | 87.7600 | 2,545,040 | 1.62% |
CENIT | Deutsche Börse | 124,437 | 0 | € | 21.5200 | 2,677,884 | 1.70% |
CEWE STIFTUNG | Deutsche Börse | 35,000 | 35,000 | € | 73.8300 | 2,584,050 | 1.65% |
SAP | Deutsche Börse | 36,500 | -16,500 | € | 91.4500 | 3,337,925 | 2.13% |
USU SOFTWARE | Deutsche Börse | 142,806 | 0 | € | 27.0000 | 3,855,762 | 2.45% |
Technology Hardware | |||||||
AURES TECHNOLOGIES | Euronext Paris | 69,000 | 69,000 | € | 29.0400 | 2,003,760 | 1.28% |
EVS | Euronext Brussels | 112,500 | 72,500 | € | 35.2000 | 3,960,000 | 2.52% |
TKH GROUP | Euronext Amsterdam | 152,601 | -7,500 | € | 48.6400 | 7,422,513 | 4.73% |
TOMRA SYSTEMS | Oslo Stock Exchange | 370,000 | 0 | NOK | 102.0000 | 3,943,038 | 2.51% |
Semiconductors | |||||||
MELEXIS | Euronext Brussels | 26,135 | -15,000 | € | 71.9000 | 1,879,107 | 1.20% |
Healthcare Equipment & Services | |||||||
FRESENIUS | Deutsche Börse | 52,000 | -8,000 | € | 75.0600 | 3,903,120 | 2.48% |
GERRESHEIMER | Deutsche Börse | 75,000 | 10,000 | € | 70.4300 | 5,282,250 | 3.36% |
NEXUS | Deutsche Börse | 144,989 | -104,172 | € | 25.8900 | 3,753,765 | 2.39% |
PHARMAGEST INTERACTIVE | Euronext Paris | 150,000 | -10,000 | € | 38.6600 | 5,799,000 | 3.69% |
UDG HEALTHCARE | London Stock Exchange | 250,786 | -140,000 | £ | 8.6600 | 2,469,843 | 1.57% |
Pharma & Biotech | |||||||
ABLYNX | Euronext Brussels | 179,950 | 0 | € | 11.2900 | 2,031,636 | 1.29% |
KIADIS PHARMA | Euronext Amsterdam | 72,424 | -301,908 | € | 5.5000 | 398,332 | 0.25% |
Electrical & En gineer ing | |||||||
ANDRITZ | Vienna | 115,000 | 18,000 | € | 52.7400 | 6,065,100 | 3.86% |
CFE | Euronext Brussels | 34,302 | -7,000 | € | 124.1000 | 4,256,878 | 2.71% |
JENSEN GROUP | Euronext Brussels | 105,000 | 5,000 | € | 41.5000 | 4,357,500 | 2.77% |
NORMA GROUP | Deutsche Börse | 105,700 | 13,000 | € | 45.5100 | 4,810,407 | 3.06% |
TECHNOTRANS | Deutsche Börse | 134,896 | -34,065 | € | 37.6600 | 5,080,183 | 3.23% |
Materials | |||||||
ALIAXIS | Euronext Expert Market Brussels | 128,998 | 6,850 | € | 21.5500 | 2,779,907 | 1.77% |
AVANTIUM | Euronext Amsterdam | 169,636 | 0 | € | 9.0522 | 1,535,583 | 0.98% |
CORBION | Euronext Amsterdam | 150,000 | 20,000 | € | 28.0000 | 4,200,000 | 2.67% |
KINGSPAN | Dublin | 140,000 | 20,000 | € | 30.0550 | 4,207,700 | 2.68% |
UMICORE | Euronext Brussels | 77,500 | 4,500 | € | 60.9000 | 4,719,750 | 3.00% |
Options | |||||||
KIADIS Warrants | 80,000 | 80,000 | € | 1.0700 | 85,600 | 0.05% | |
DAX PUT strike 11.000 jun17 | 1,000 | 1,000 | € | 168.6000 | 168,600 | 0.11% | |
102,601,874 | 65.32% |
Shares unquoted companies
Company | Sector / Market | Currency | Valuation in € | in % of Net Asset Value |
ANTERYON | Technology Hardware | € | 115,537 | 0.07% |
MAPPER LITHOGRAPHY | Semiconductors | € | 227,034 | 0.14% |
342,571 | 0.22% |
Co-investments Capricorn Venture Funds | Waardering in € | ||
EPIGAN | Semiconductors | € 305,706 | 0.19% |
FRX POLYMERS | Materials | $ 2,088,648 | 1.33% |
GREEN BIOLOGICS | Materials | £ 2,335,144 | 1.49% |
SEQUANA MEDICAL | Healthcare Equipment & Services | CHF 1,403,118 | 0.89% |
6,132,616 | 3.90% |
Investments in venture funds | in % of | |||
CAPRICORN VENTURE PARTNERS | Currency | Last Valuation Date | Valuation in € | Net Asset Value |
CAPRICORN CLEANTECH FUND | € | 30/06/2017 | 1,114,829 | 0.71% |
CAPRICORN HEALTH-TECH FUND | € | 30/06/2017 | 10,029,069 | 6.38% |
CAPRICORN ICT ARKIV | € | 30/06/2017 | 5,036,919 | 3.21% |
CAPRICORN SUSTAINABLE CHEMISTRY FUND | € | 30/06/2017 | 3,568,500 | 2.27% |
THIRD PARTY FUNDS | ||||
CARLYLE EUROPE TECHNOLOGY PARTNERS I | € | 31/03/2017 | 47,822 | 0.03% |
CARLYLE EUROPE TECHNOLOGY PARTNERS II | € | 31/03/2017 | 1,238,013 | 0.79% |
CETP LP CO-INVESTMENT | £ | 31/03/2017 | 73,743 | 0.05% |
LIFE SCIENCES PARTNERS III | € | 31/03/2017 | 518,000 | 0.33% |
LIFE SCIENCES PARTNERS IV | € | 31/03/2017 | 1,861,000 | 1.18% |
SCHRODER VENTURES LSF II | $ | 31/12/2016 | 49,529 | 0.03% |
VENTECH CAPITAL 2 | € | 31/12/2016 | 72,006 | 0.05% |
VERTEX III | $ | 31/03/2017 | 992,468 | 0.63% |
24,601,899 | 15.66% | |||
Total Financial Assets - Shares | € | 133,678,960 | 85.11% | |
Change in valuation in unquoted companies | € | -2,261,134 | -1.44% | |
Total Financial Assets - Shares after depreciation | € | 131,417,826 | 83.67% | |
Amounts receivables companies | ||||
Company | Face value in currency | Currency | Valuation in € | in % of Net Asset Value |
Loan notes | ||||
ANTERYON | 150,000 | € | 150,000 | 0.10% |
GREEN BIOLOGICS | 282,483 | $ | 247,532 | 0.16% |
397,532 | 0.25% | |||
Commercial paper | ||||
AVEVE | 3,000,000 | € | 2,998,709 | 1.91% |
ETEXCO | 2,250,000 | € | 2,249,384 | 1.43% |
5,248,093 | 3.34% | |||
Total Financial Assets - Amounts receivable | € | 5,645,624 | 3.59% |
Total Financial Assets | € | 137,063,449 | 87.26% |
Cash | € | 12,854,509 | 8.18% |
Other Net Assets | € | 7,156,036 | 4.56% |
Quest for Growth - Ordinary shares | € | - | 0.00% |
Total Net Asset Value | € | 157,073,994 | 100.00% |
4
Quest for Growth NV published this content on 27 July 2017 and is solely responsible for the information contained herein.
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