Somar Turns 1 – May 2017

Somar Turns 1

One year ago, we partnered to start the Somar journey. 12 months later we are off to a good start and look forward to the future with strong confidence. My conviction that Somar will deliver superior risk-adjusted returns to our investors has never been higher: our performance is ramping up nicely; we have a highly professional, cohesive and committed team; and a stable and growing group of investors.

Since its inception, Somar had a gross return of 12.37% and a net return of 6.93% vs. 17.46% for the S&P500, and 20.21% for the Eurostoxx 50 indexes.

Throughout the first year we have kept our net exposure at 50%. That means we expect to have half of the risk of the market. Therefore, if the market is up 10% we expect to be up 5%. And conversely, if the market is down 10% we expect to be down 5%. Any return above this expectation should be viewed as value being added by our stock-picking ability.
We strive to offer you the highest service and peace of mind. We have built Somar into a high-performance organization with the highest professional standards. We keep improving and are always looking to increase the service we offer you. Please let us know if there are areas where we can do better for you.

Since our inception we have been blessed to have you as our partner. You have shared our vision of investing long-term in secular winners. As one of you told me: “In the long term, the stock price will follow the sustainable growth in profit”. We are happy to report that in the first 12 months some of you have continued to reinforce your original investment in Somar and, as I write these lines, we have not received a single notice for redemption. This, together with our performance has allowed us to grow our assets more than 50% in our first year, and we have recently crossed above $25mn of AUM.

We continue to have substantially more attractive investment opportunities than capital to deploy. We will close the fund well in advance of that being close to a consideration. Currently we plan a first close when we reach $100mn. We are finding a lot of opportunities in emerging secular winners in Europe and the US. Attached we share a summary of our investment in Zooplus, the European online pet retail leader which is a good illustration of the type of investments we focus on.

A personal note

I realize the current media narrative around active management has not been supportive over the past 12
months. Therefore, it took courage and vision for you to join our project. I am grateful for your trust and
committed to reward you by continuing to deliver superior risk-adjusted returns.

We are off to a great start and we see a large opportunity ahead. Given the large amount of secular change
and speed of change we believe the future years will come to be known as the golden age of secular investing
and value creation. Thanks for joining us on this exciting journey.

 

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