| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 0% | 0% |
The Evermore Global Value Fund delivered strong performance with Institutional Class shares up 9.28% year-to-date, outperforming the MSCI All Country World Index ex USA. The fund's catalyst-driven approach to special situations investing proved effective, particularly in family-controlled companies which now represent 76.2% of the portfolio excluding cash. BW LPG was the largest contributor, benefiting from strong VLGC rates and dividend yields exceeding 30% before the fund exited at substantial gains. The fund initiated four new positions including Solvay SA, a Belgian chemicals company poised for separation into two entities by year-end 2023. However, Viaplay Group was the largest detractor after unexpected profit warnings and CEO resignation led to the fund's exit. The managers maintain their focus on finding compelling value creation opportunities in family-controlled businesses across global markets, leveraging their extensive network and operating experience to identify catalysts that can unlock significant value over time.
The fund seeks to leverage deep operating experience and global relationships to identify special situations in undervalued companies undergoing strategic changes that will unlock value, with particular focus on family-controlled companies with catalysts.
The managers expect family-controlled companies to continue growing within the portfolio as more such businesses undergo value-accretive changes. They remain focused on finding compelling investment cases across various regions, sectors, and industries while tagging along with great value creators in cheap family-controlled companies that can compound well over time.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 31 2023 | 2023 Q3 | BWLPG.OL, DHT, GNK, SOLB.BR, STST.OL, VPLAY.ST | Chemicals, Family-controlled, global, shipping, special situations, value | - | Evermore Global Value Fund outperformed with 9.28% YTD returns, driven by successful shipping investments like BW LPG and new positions in catalyst-driven situations like Solvay's upcoming separation. Family-controlled companies now comprise 76% of the portfolio. The fund exited underperforming Viaplay after management changes and deteriorating fundamentals, maintaining focus on special situations with clear value catalysts. |
| Jun 30 2023 | 2023 Q2 | BOLLORE.PA, BWLPG.OL, CADELER.OL, CLMT, DHT, ENOVIS, ESAB, EXO.PA, GNK, HAUTO.OL, HEMNET.ST, IAC, INWIT.MI, KBCPF, KKR, LIFCO-B.ST, MTG.ST, NETI, UMG.AS, VIV.PA, VPLAYB.ST | Catalyst-driven, Energy Transition, Family-controlled, global, shipping, special situations, Streaming, value | - | Evermore Global Value Fund focuses on catalyst-driven value investing in family-controlled companies and special situations globally. Despite Q2 underperformance due to Viaplay streaming disappointment, the fund benefits from strong shipping exposure and offshore wind positioning through the Eneti-Cadeler merger. The concentrated portfolio of 23 positions emphasizes companies undergoing strategic changes with specific value creation catalysts. |
| Jan 3 2023 | 2022 Q4 | ASAO SS, CLMT, INW IM | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2023 Q3 |
ShippingThe fund has significant exposure to shipping companies including BW LPG, DHT Holdings, Stainless Tankers, and Genco Shipping. BW LPG was the largest contributor to performance with strong VLGC rates and significant dividend yields exceeding 30%. The fund sees opportunities in the maritime sector through family-controlled companies. |
Tankers LNG Shipping Dry Bulk Shipping Maritime VLGC |
ChemicalsThe fund initiated a position in Solvay SA, a diversified chemicals company with market leading positions in soda ash, silica, specialty polymers, and composites. The investment thesis centers on the upcoming separation into two companies by end of 2023, which should crystallize value of specialty chemical assets. |
Specialty Chemicals Soda Ash Polymers Composites Separation | |
MediaViaplay Group was the largest detractor to performance after announcing a profit warning and CEO resignation. The Nordic streaming company faced higher-than-expected churn following price increases and deteriorating advertising revenues, leading to the fund's exit from the position. |
Streaming Nordic Advertising Subscription | |
| 2023 Q2 |
ShippingFund has significant exposure to shipping companies including dry bulk operators like Genco Shipping & Trading and offshore wind installation vessel operators like Eneti and Cadeler. The shipping sector benefits from favorable industry fundamentals including low order books, environmental regulations leading to slower speeds and increased scrapping, and geopolitical disruptions creating longer shipping routes. |
Dry Bulk Offshore Wind Maritime Vessel Operators Shipping Rates |
Energy TransitionThe fund is positioned in offshore wind installation through Eneti and Cadeler, which are benefiting from the global shift to renewable energy. The merger between these companies creates the largest offshore wind vessel operator globally, well-positioned for the structural shift to green initiatives as wind turbines get larger and capacity needs grow. |
Offshore Wind Renewable Energy Green Initiatives Wind Turbines Installation Vessels | |
ValueThe fund focuses on catalyst-driven value investing, seeking companies with compelling valuations undergoing strategic changes to unlock value. The approach emphasizes original research, business operating experience, and collaborative engagement with management to identify undervalued situations with specific catalysts. |
Catalyst-driven Undervalued Strategic Changes Value Creation Special Situations | |
StreamingViaplay Group, a Nordic streaming media company, was the largest detractor after missing numbers and experiencing higher than expected churn following price increases. The company faced deteriorating advertising revenues and lower demand in Nordic and international streaming markets, leading to CEO resignation and guidance withdrawal. |
Nordic Streaming Subscriber Churn Advertising Revenue Price Increases Media |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| DHT | The Fund initiated four new positions during the Period – DHT Holdings, Inc. (ticker: DHT US), Stainless Tankers ASA (STST NO), Genco Shipping & Trading (GNK US) and Solvay SA (SOLB BB). |
| STST.OL | The Fund initiated four new positions during the Period – DHT Holdings, Inc. (ticker: DHT US), Stainless Tankers ASA (STST NO), Genco Shipping & Trading (GNK US) and Solvay SA (SOLB BB). |
| GNK | The Fund initiated four new positions during the Period – DHT Holdings, Inc. (ticker: DHT US), Stainless Tankers ASA (STST NO), Genco Shipping & Trading (GNK US) and Solvay SA (SOLB BB). |
| SOLB.BR | The Fund initiated a position in Solvay SA (SOLB BB) during the Period. Headquartered in Belgium, Solvay is a $11.2 billion market cap diversified chemicals company with market leading positions in a variety of segments, including soda ash, silica, specialty polymers, composites, mining reagents, etc. Solvay is a classic investment case for the Fund that underscores the intersection of a family-controlled company and catalysts on the horizon: A family-controlled company with a longstanding history that began in 1863 with brothers Ernest and Alfred Solvay that developed the breakthrough ammonia-soda process that is still implemented today to produce soda ash. The Solvay family owns about 31% of the company through its investment holding company, Solvac SA. A new CEO with a proven, multi-year track record. Since taking the helm in March 2019, CEO Ilham Kadri has helped to transform the company over the last few years by optimizing the portfolio (divested product lines), deleveraging the balance sheet and focusing on free cash flow generation. Separation of the company is the next major step in Solvay's transformation. While the company first announced this initiative back in March 2022, Solvay is now ready to split into two separately-listed companies by the end of 2023. Solvay (parent) will split into Syensqo (SpecialtyCo), which will focus on the growth-oriented assets, and Solvay (EssentialsCo), which will focus on the more resilient, mature assets in the portfolio. We believe this transformation will help to crystallize the true intrinsic value of Solvay's specialty chemical assets, which are masked within a conglomerate that generally tends to trade closer to the segment with the lowest valuation multiple. |
| BWLPG.OL | BW LPG (BWLPG NO) is one of the leading liquified petroleum gas (LPG) vessel operators in the world. The Fund exited its position in BW LPG during the second quarter of 2023, realizing a healthy gain for a position that we held for just under a year. It was the largest contributor to Fund performance during the Period. Headquartered in Singapore and listed on the Oslo exchange, BW LPG has a market cap of $1.4 billion and a fleet of 45 Very Large Gas Carriers (VLGCs), of which 16 vessels are outfitted with the latest cost-effective, low emissions LPG dual-fuel propulsion technology. The main family-controlled shareholder is the BW Group (41% stake), a well-regarded maritime and green-related family-controlled holding company managed by the long-term oriented value creator and savvy investor, Andreas Sohmen-Pao. Since we initiated our position in late August 2022, the VLGC rates continued to strengthen, and the order book of new vessels delivered this year has been well absorbed. Given the strong cash flow generation, BW LPG has paid a significant amount of dividends so far this year, representing a 100% payout ratio and dividend yield (the dividend per share, divided by the price per share) in excess of 30%. In May 2023, the company announced a share buyback program to purchase up to 6 million shares for a maximum of $50 million. In mid-June 2023, BW LPG announced a reverse book building process to purchase shares through a Dutch Auction. We decided to tender all our shares at NOK 108 per share and lock in a substantial return as the share price appreciated faster than we expected. |
| VPLAY.ST | Viaplay Group (VPLAYB SS), a $453 million market cap, Nordic streaming media company, was the largest detractor to performance during the Period. In June 2023, Viaplay had an unexpected turn of events, announcing a profit warning and the CEO's resignation on a Sunday afternoon (NY time). We were certainly surprised and extremely disappointed by these recent developments, especially for our long-term holding that had successfully navigated the pandemic and grew the subscriber base significantly over the last two years. Earlier this year, Viaplay initiated its planned price increases across various markets but clearly those efforts were unsuccessful with a higher-than-expected churn recently. Management revised downward the full-year 2023 guidance and withdrew the operating and financial targets for 2025 citing a rapid deterioration of advertising revenues and lower demand in the Nordic and international streaming markets. They attributed the higher churn levels to the rising cost of living following the price increases. Anders Jensen, who was the CEO since Viaplay spun out from its former parent, Modern Times Group (MTG) in April 2019, resigned effective immediately. Anders was replaced by Jorgen Madsen Lindemann, who was the former CEO of the predecessor parent company, MTG, and prior to that held senior leadership positions at MTG spanning over 26 years, including head of Nordic operations and international operations, and head of sports rights acquisition and production. With increased uncertainty, diminishing investor confidence, and a greater likelihood of impairments in the expanded international markets, we ultimately decided to exit our position in Viaplay at a loss during the third quarter of 2023. |
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