DEALING WITH A PARADIGM SHIFT
The world is closely moniroting the economic recovery, and all the major countries are called to support it with extraordinary investment plans and fiscal stimulus packages focused on sustainability, green transition, and digital transformation. Certainly, this opportunity has a broader horizon capable of reshaping the global context for the next two decades and regaining lost ground, especially in the field of energy infrastructure and digitalization. On Digital infrastructure specifically, the priority is the rapid implementation of 5G networks to enhance connectivity.
Companies exposed to these structural growth trends have the potential to thrive, benefiting their stakeholders, including shareholders, employees and the community. Climate change and digitalization are among the most important investment themes of the moment, underlying the ongoing paradigm shift. Furthermore, infrastructures are highly appealing to investors because they are resilient, decoupled from GDP, and at the same time provide a hedge against inflation.
GAINING EXPOSURE TO THE TRENDS ABLE TO RESHAPE THE GLOBAL CONTEXT
Kairos Equity Yield (KEY) is a long-short/long-bias equity product that invests in companies operating in regulated and semi-regulated sectors (mainly utilities, transport and telecommunications infrastructure), expected to benefit from the above mentioned investment plans.
The Fund aims to achieve long-term capital appreciation with a portfolio allocation in issuers mostly based in Europe where we deem we can exploit and capitalize on the long standing relationships and knowledge of the sector. It represents an investment solution that combines the potential of the equity market with the generally contained volatility typical of the bond market. It is indeed a product that offers potential equity-like returns while providing cash flow visibility similar to bonds.
KAIROS' OFFERING
The investment universe of KIS KEY is broad and composed of so-called countercyclical single names, able to offer a business performance independent of the economic cycle due to the exposure to secular investment trends, under a regulated or semiregulated environment.
The investment universe offers therefore exposure to a high earnings visibility and generally delivers a stable dividend over time. The companies pertaining to the investment universe operate in a monopoly or semi-monopoly regime, thereby presenting high barriers to entry. Additionally, most of the companies benefit from inflation, as an increase in inflation leads to higher tariffs and, consequently, revenues growth.
The more cyclical part of the Fund is linked to the transportation infrastructures. Some of the demand is indeed correlated with disposable income.
The Fund is managed with a time horizon consistent with the nature of infrastructure assets and follows a disciplined investment process with a strong fundamental focus and in compliance with ESG criteria.
KIS KEY’s management style is active with a long-short strategy to enhance the risk-return profile as much as possible, without any reference to a benchmark. The portfolio includes a core portion invested with a long-term perspective in approximately 30-40 stocks characterized by organic growth and a European focus, with low portfolio turnover. Historically, the top 10 positions account for approximately half of the fund’s exposure. A careful fundamental analysis and constant engagement with all stakeholders form the foundation of the strategy.
The short positions, built mostly on single names, serve both as a hedge and an investment, seeking market catalysts such as regulatory or management changes that can contribute to the portfolio’s profitability.
The stock-picking activity is the primary driver of performance, and the criteria for selecting companies to invest in cannot ignore the long-term sustainability of their growth trajectory.
KIS KEY allows the subscribers to be exposed to an investment universe that is experiencing a paradigm shift.
According to the SFDR Regulation on ESG funds, the Fund is classified as art. 8. Further information on sustainability aspects is available at the link https://www.kairospartners.com/esg-en/?lang=en and in the prospectus.
KIS KEY is aimed at investors with a medium-to-high risk tolerance, who can commit their capital for a period of 3 to 5 years and seek to meet defined investment objectives. They should have experience or an understanding of so-called risk capital products and be willing to tolerate significant capital losses (should they occur). Investment involves a risk component, and as a result, the originally invested capital may not be fully or partially recovered. Past performance is not indicative of future results. KIS KEY’s synthetic risk indicator is classified at level 4 out of 7. Comprehensive information regarding risks is available in the Prospectus and Key Information Document (KID).
THE MANAGEMENT TEAM
The management of KIS KEY is entrusted to Oriana Bastianelli and a team with a strong specialization in the analysis of relevant sectors and regulatory dynamics, which requires experience and historical background.
The management team seeks the best investment opportunities based on a deep understanding of the companies, which is the result of a carefully cultivated network of relationships with managers and shareholders, as well as the relevant market dynamics, including regulatory aspects.
We are signatories of the PRI, Principles for Responsible Investment, the United Nations initiative which contributes to the development of an increasingly sustainable global financial system.
We are signatories of the Carbond Disclosure Project (CDP), the international non-profit organization that intends to contribute to the construction of a sustainable economy for people and the planet.