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 primarily invests in:
- UTILITIES: transmission and distribution networks, integrated and renewable.
- TRANSPORTS: transport infrastructure such as airports, highways, railways, ports.
- TELECOMMUNICATIONS: telecommunications infrastructure such as towers, broadband.
- REAL ESTATE: operators, products and services related to the real estate market.
The Fund is managed with an investment horizon aligned with the long-term nature of infrastructure assets and follows a disciplined investment process with a strong fundamental focus, in line with ESG principles.
KIS KEY adopts an active management style through a long/short strategy aimed at optimizing the risk-return profile, without any benchmark reference. The portfolio includes a core allocation of approximately 30–40 low-turnover stocks, selected with a long-term view and focused on European companies exhibiting sustainable organic growth. Historically, the top 10 positions account for around half of the sub-fund’s total exposure. The strategy is built on thorough fundamental analysis and ongoing engagement with all relevant stakeholders.
Short positions, primarily taken on single names, serve a dual purpose: hedging and generating alpha. These are selected based on potential market catalysts, such as regulatory or management changes, that could enhance the portfolio’s profitability.
Stock-picking is the primary driver of performance. Company selection is based on stringent fundamental criteria and the long-term sustainability of their growth trajectory, using a bottom-up approach enriched with ESG filters and, where appropriate, complemented by top-down macroeconomic analysis to identify sector trends.
A distinctive feature of the Fund is its structured use of stewardship, which translates into active and ongoing dialogue with portfolio companies. This commitment is realized through diligent monitoring of corporate performance and both individual and collective engagement efforts, focused on specific business issues and ESG factors, and addressed to both executive and non-executive stakeholders.
Portfolio construction is driven by a continuous assessment of potential returns and associated risks, consistently integrating fundamental analysis, ESG considerations, and active exposure management.
KIS KEY therefore represents an advanced investment solution, designed to meet return objectives in a market environment undergoing a profound transformation, where the entire investable universe 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.
Disclaimer
This is a marketing communication for advertising purposes. Please refer to the Prospectus and the Key Information Document (KID) before making any final investment decision. These documents are available in Italian on the website www.kairospartners.com and at the registered office of Kairos Partners SGR S.p.A. (“Kairos”) and placement agents, also in a paper copy . A summary of Investors rights is available in both Italian and English at https://www.kairospartners.com/sintesi-dei-diritti-degli-investitori-it-en/. Past performance is shown net of expenses borne by the Fund and before taxes. Past performance does not predict future returns. The investment concerns the acquisition of shares in the Fund and not a given underlying asset which remains the property of the Fund. The investment implies a risk component, consequently, some or all of the originally invested capital may not be recovered. Exchange rates movements may affect the value of the investment and costs when expressed in a currency other than the investor’s reference currency. Information on the features of the Fund and general sustainability aspects (ESG) can be found at www.kairospartners.com/esg/, in accordance with Regulation (EU) 2019/2088. If the Fund is marketed in countries other than the country of origin, Kairos has the right to terminate the marketing agreements based on the withdrawal of notification process provided for by Directive 2009/65/EC.
The information and opinions provided herein do not constitute a public offer, nor a personalised recommendation. They do not represent a contract and are not prepared in accordance with a legislative provision, nor are they sufficient to make an investment decision and are not intended for persons residing in the United States of America or other countries in which the Fund is not authorized for marketing. The information and data are deemed correct, complete and accurate. However, Kairos does not provide any express or implied representation or warranty as to the accuracy, comprehensiveness or fairness of the data and information and, when they have been drafted by or derive from third parties, assumes no liability for the accuracy, comprehensiveness, fairness or adequacy of such data and information, although the sources used are considered to be reliable. When not specified otherwise, the data, information and opinions are to be deemed updated at the report date and may be subject to changes with no prior notice or subsequent communication. Any citations, summaries or reproductions of the information, data or opinions provided herein by Kairos must not alter the original meaning, nor can they be used for commercial purposes and must cite the source (Kairos Partners SGR S.p.A.) and the website www.kairospartners.com. Citation, reproduction and, in any case, use of the data and information of third parties it must occur, when allowed, in full compliance with the rights of the relative owners.
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