Standard & Poor's (S&P) Fund Services has awarded an "A" fund management rating to the Delta Participation Fund, following an extensive quality assessment of the investment process and the management of this fund.
- Standard & Poor's award an "A" fund management rating to the Delta Participation Fund
Standard & Poor's (S&P) Fund Services has awarded an "A" fund management rating to the Delta Participation Fund, following an extensive quality assessment of the investment process and the management of this fund. This extremely specialised fund is a joint venture for Delta Lloyd Asset Management and the private client manager Veer Palthe Voûte. It has been set up in order to take advantage of the favourable fiscal climate in the Netherlands for investment interests of over 5%.
The CIO of Delta Lloyd Asset Management, Alex Otto is the chairman of the investment board, made up of experienced investors from both investment houses. They look for stable businesses with a strong cash-flow and attractive yields, which can be bought at a discount on their intrinsic value.
The extremely concentrated portfolio is directed mainly at small and mid-cap Dutch shares. Its aim is to generate a 10% annual yield, half of which is in dividend, and through this highly demanding objective the team can be driven to look further and further beyond the Dutch market. Many of the funds examined are not particularly transparent, so the team has to be firmly convinced that there is a catalyst to add value and a good exit strategy. The fund is built up in such a way as to limit the negative impact of redemptions and to pay yields of over 10% with a performance bonus. The fund enjoys an excellent reputation within the market. The tendency towards capitalisation and the method for value creation have worked in its favour, but the directed package and the strict selection of shares - avoiding losses and choosing winners - are just as important. Its performance has increased through a number of investments having been transferred at par into the robust Dutch M&A market.
Clearly this package is not without its risks, but experience and a skilled team with a well-defined remit have led to the award of a well-deserved ‘A' rating. For further information about Standard & Poor's Fund Management Ratings Reports, go to www.funds-sp.com/.
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