European markets turned positive in April. With eyes still on the year’s major economic themes, markets were boosted by a solid start to the quarterly earnings season. European private equity funds were very active in M&A deals and in taking public companies private. Private equity has highlighted discounts in small and medium-sized companies, an asset class ignored by investors these past few years.
In April, Amplegest MidCaps underperformed its benchmark index (+0.70% vs. +0.87%), but leads by +95 bps annually (+8.00% vs. +7.05%). Half of the fund’s companies published results in April.
We benefitted from the strong revaluation of SES-imagotag (+33%) after its announcement of a record contract and a shareholding agreement with Walmart. The group will begin to roll out its smart digital labels in 500 Walmart stores by the end of 2024, with new orders to follow. SES-imagotag is undergoing a significant change of scale, and will benefit from visibility to other retailers in the United States. The economic environment (unstable prices, shortage of workers and higher salaries) encourages retailers to switch from paper labels to electronic labels, which improve margins by automating price adjustments for products on display.
OVH (–17%) announced disappointing half-year results. The group is being cautious with its clients because of economic uncertainties and has lowered its forecasts for the current year. We are holding our position in this asset, which is one-of-a-kind in Europe and indispensable for European digital sovereignty.
SARTORIUS STEDIM BIOTECH (–14%) was hurt by the announcement of the Polyplus acquisition and by disappointing Q1 results. The group is struggling from the winding down of Covid-related activity and from inventory reduction by certain customers.
We adjusted portfolio weightings by adding to PIRELLI and SAN LORENZO, and by trimming ASMi and INWIT.