Off the back of a challenging market environment in 2019, 2020 did not provide any respite. In fact, quite the contrary, 2020 has well and truly earned its place in the history books, with a global pandemic, the likes never seen before in recent history, resulting in global lockdowns impacting every facet of our lives.
The ramifications of the COVID-19 pandemic have resulted in a volatile market environment across all asset classes. As we approach the end of the year there are however signs that we may be reaching a turning point in terms of the pandemic. November saw the announcement of a number of vaccines that are deemed to be successful and safe for use, offering at least hope that 2021 will offer the opportunity for the return to “normal”, whatever that will be in a post-COVID-19 world.
For us, like everyone else, 2020 was challenging. This said the transition to working from home for all our staff across multiple jurisdictions was implemented quickly and efficiently, ensuring the safety of our team, whilst retaining full operational capabilities and services to our clients and funds, demonstrating the robustness of our infrastructure.
UN-supported Principles for Responsible Investment (PRI)
The year also allowed us to take stock of our views of the world, resulting in us increasing our focus and attention towards our ESG and responsible investment approach. During the year, we became a signatory of the UN-supported Principles for Responsible Investment (PRI), believing that responsible investment is best embodied by the PRI and we are committed to its six guiding principles. Additional information regarding our approach is available on Our ESG Approach page, along with a copy of our Responsible Investment Policy.
The Institutional Investors Group on Climate Change (IIGCC)
In addition to becoming a signatory of the UN PRI, we have also become a member of The Institutional Investors Group on Climate Change (IIGCC), which provides investors with a collaborative platform to encourage public policies, investment practices, and corporate behaviour that seek to address long-term risks and opportunities associated with climate change. The IIGCC state that their mission is “to mobilise capital for the low carbon transition and to ensure resilience to the impacts of a changing climate by collaborating with business, policymakers and fellow investors.”
We elected to become a member of the IIGCC, believing that by doing so we will be better placed to express our views and champion the changes we believe are required in support of well-established climate targets. Additional information regarding the IIGCC is available at https://www.iigcc.org/.
Ultimately, our objective is to offer our investors access to the best investment ideas, within a framework that seeks to achieve better environmental, societal and governance outcomes.
From a fund perspective, we remain positive regarding our fund range and the ability of the investment teams we work with to add value to our investors’ portfolios. We will continue to look for opportunities to selectively expand our fund range, but only as and when we find those strategic partners that we truly believe to be class-leading and who have the ability to deliver value for our investors over the longer term.
The renaming of the Strategic European Smaller Companies Fund
We remain active in terms of the management of our fund range, seeking to make enhancements and adjustments to our offering as and when deemed relevant. To this end, the decision was made to change the name of the ‘Strategic European Smaller Companies Fund’ to the ‘Strategic European Silver Stars Fund‘ during the year. The new name references the Alpine Edelweiss or ‘Silver Star’ flower, which traditionally grows in unforgiving conditions at very high altitudes. The small white flower is a symbol of bravery and perseverance for those able to seek it out.
Further, the Edelweiss flower grows in very specific parts of the Alpine region where the localised conditions meet its exacting requirements, in a similar way to how the Fund’s investment team select their investments. The Alpine region also straddles the countries where many of the Fund’s investment ideas are sourced, with companies in France, Switzerland, Italy, Austria and Germany typically representing more than half of the portfolio.
At the same time, the Fund’s liquidity terms were improved, enabling investors to trade on a daily, instead of a weekly basis. The market capitalisation constraints were also removed from the prospectus. The bias within the portfolio towards small and mid-cap companies comes from the investment team’s fundamental 360-degree private equity style proprietary research, rather than being the result of a specific restriction in their mandate, and consequently, this bias will remain.
Since its inception in May 2015, the Fund has returned 66.07% to investors, significantly outperforming its benchmark by 48.55%. This exceptionally strong absolute and relative performance translates into an annualised return of 9.23% compared with 2.85% for the benchmark*. For further information, please visit the fund page of the Strategic European Silver Stars Fund.
At Eric Sturdza Investments we are very mindful of the global environmental and social issues that we face today and our obligation to take steps whenever possible to support initiatives that seek to address these. To this end, we elected to work with the Tumaini Fund, Eden Reforestation Project and Guernsey Cheshire Homes as part of our charitable engagement programme in 2020.
We are very proud of the initiatives that our charitable engagement programme has supported over the past few years and will support in 2021:
The Tumaini Fund
In support of The Tumaini Fund, Eric Sturdza Investments has provided the funding for the construction of five clean water wells, providing clean safe drinking water for approximately 3,500 people; however, this number can expand significantly during the dry season when surface water decreases. We have also provided 300 secondary school starter kits, containing the books that children are required to obtain in order to be admitted for secondary education and will be providing a further 500 kits in 2021.
Dr Susan Wilson, founder of The Tumaini Fund states “education is the only means the orphans supported by the Tumaini Fund have to escape the grinding poverty of subsistence farming.” Read more regarding the Tumaini Fund and their fantastic work.
Eden Reforestation Projects
To date, we have provided funding for the planting of over 50,000 trees via the Eden Reforestation Project and will expand on this effort in 2021 with the planting of a further 65,000 trees. Further details in this regard can be found here.
Guernsey Cheshire Home
We have had the pleasure of working with the Guernsey Cheshire Home over the past couple of years, aiding the home where possible. This commitment will continue in the year ahead, with us supporting them in the re-flooring of the home’s main activity area.
Project Sparkle is a local initiative run by the Leo Club of Guernsey, who co-ordinate the initiative which aims to deliver gifts to individuals who will be recovering from a hospital stay and, who are extremely unlikely to receive either gifts or company over the festive period. We as a Company and through the generosity of our staff have supported Project Sparkle for the last three years, a commitment that continued in 2020 and to date has seen approximately 150 gift bags donated.
Italian Red Cross
During the earlier stages of the COVID pandemic, we provided support to the Italian Red Cross, one of the many heroic organisations that were fighting tirelessly to protect and save lives. The donation was allocated towards their relief efforts for the benefit of the Italian population during the unprecedented event caused by the outbreak of the pandemic.
Season’s Greetings Festive Film
On behalf of everyone at Eric Sturdza Investments, we would like to wish you all a joyful, peaceful festive season and a prosperous 2021.
We look forward to working with you in the years ahead and invite you to enjoy our festive film.
* Performance as at 31/01/2020, figures provided by Eric Sturdza Investments. Individual performance of the Fund may vary and historical data is not an indication of future results. Please click on Disclaimer Page to view full disclaimers.