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.

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.

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.

Despite the Fund not explicitly promoting environmental or social characteristics or making such investments an objective, Kairos has implemented measures for the monitoring of the sustainability risks for the purpose of assessing and limiting the same.

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).