Basic Information:
”The Proprius Partners DACH Value Special Investment Fund is an actively managed equity fund, the objective of whose investment activities is to achieve the highest possible capital appreciation for the fund unit in the long term by diversifying assets in accordance with the investment fund law and the fund’s rules.
In addition, the fund aims to promote combinations of environmental and social characteristics in accordance with Article 8 of the SFDR, and the companies targeted for investment must adhere to good governance practices. To promote and monitor these objectives, the fund uses sustainability assessments maintained by external parties for assessing the sustainability risks and sustainability factors of investment targets. The fund aims for a clearly higher return than funds that diversify their investments more broadly.
The fund invests its assets in securities, and primarily equities, of companies listed in German-speaking Europe (Germany, Austria, and Switzerland; DACH comes from Deutschland (D), Austria (A), and Switzerland (CH)), where the companies’ business prospects appear promising in relation to the pricing and risk level of the company’s stock. We use numerous different quantitative and qualitative criteria as part of our investment process.
The fund’s minimum subscription is €50,000.
Investment Strategy
The fund invests its assets in securities, and primarily equities, of small and medium-sized companies listed in German-speaking Europe (Germany, Austria, and Switzerland; DACH comes from Deutschland (D), Austria (A), and Switzerland (CH)), where the companies’ business prospects appear promising in relation to the pricing and risk level of the company’s stock. We use numerous different quantitative and qualitative criteria as part of our investment process.
We believe that even the best company can be a poor investment, which means that in addition to qualitative business criteria, we always pay attention to the price paid for a stock or security. The value investing philosophy is based on the insight that the price and value of a stock are two different things. The price can be seen on the stock exchange, but a value investor seeks to understand the value of a company or stock using various qualitative and quantitative methods. If the price appears to be below the estimated value of the stock, and preferably with as large a margin as possible, a value investor may be interested in making an investment.
Value companies have been observed in various academic studies to perform better than average, which is not explained by a higher-than-usual risk. A value investor aims to buy undervalued companies, for example, measured by earnings power (e.g., P/E and EV/EBIT ratios) or by assets (typically P/B ratio). Examples of other key figures used by value investors include free cash flow yield, return on equity and return on invested capital, solvency ratio, and net gearing. Thus, the aim is to buy stocks below their true value, providing a so-called margin of safety in the investment targets at the time of investment, in case of unfavorable situations. As part of risk management, in addition to company-specific risks, risks related to stock liquidity and the fund’s sector weightings are also considered. Investments are generally made with a long-term horizon, but sometimes shorter-term opportunities may arise in the markets where an attractive risk/reward ratio justifies making an investment.
The fund’s investment activities are based on a so-called bottom-up approach, meaning we make our selections based on company-level analysis. Nevertheless, we aim to favor companies in sectors where we see clear opportunities for progress and tailwinds rather than headwinds. These themes may vary according to market conditions.
Stocks in German-speaking Europe have performed quite well in various historical return comparisons. In Proprius Partners’ view, Germany and Switzerland, in particular, have distinguished themselves with excellent long-term returns. Many companies in the region have also successfully expanded globally, thereby making significant growth leaps over time.
Germany has numerous listed companies, Switzerland a reasonable number, and Austria fewer, but overall, the investment universe in these three countries is quite large, allowing us to draw our best investment ideas from a vast pool of companies. Proprius Partners’ portfolio managers have highly competitive track records in investing in securities and equities in German-speaking Europe, as well as specifically in value companies in that region. The portfolio managers also have extensive knowledge of the small and medium-sized company landscape in the region, where very interesting investment targets can be found, perhaps even more likely than in the large-cap sector. However, the fund does not make its investment decisions solely based on market capitalization or company size; the overarching theme is the value investment philosophy.
Proprius Partners believes in taking strong conviction as part of its active equity investment approach. Proprius Partners DACH Value is a special investment fund (non-UCITS), which means that we can concentrate the fund’s holdings more strongly than conventional UCITS funds. In practice, the special investment fund status also allows for maintaining a moderate number of companies in the fund and benefiting from the capital appreciation of successful stocks.
To ensure agile investment operations, Proprius Partners intends to limit the size of the Proprius Partners DACH Value special investment fund, i.e., implement a so-called soft closing measure, when the fund reaches the target size defined by Proprius Partners’ board. This measure aims to avoid a ‘bull in a china shop’ effect.
The fund only follows the company and sector weightings of German-speaking European indices to a limited extent. Investment decisions are made without the restrictions imposed by indices. As a result, the fund’s performance may deviate significantly from general market developments. This, in turn, is due to the fact that our fund presumably has a very high active share, meaning the fund’s composition clearly differs from that of the region’s general indices. Proprius Partners DACH Value prioritizes maximizing long-term returns over minimizing volatility. The fluctuation in the fund unit’s value can be very strong at times, and we also encourage our clients to be patient with their fund investment.”
Note! The fund has not yet started its operations. It will be interesting to see how it performs once it gets going 
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