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Köhn & Kerkhoff: SkanDACH- The most innovative countries in Europe
Date:
13. March 2024
In mid-October 2023, Dr. Maximilian Köhn and René Kerkhoff from Munich launched their equity fund, K&K - Wachstum & Innovation R (ISIN: DE000A3ERMG0) / K&K - Wachstum & Innovation I (ISIN DE000A3ERMH8).
Leveraging their unique approach, Köhn & Kerkhoff, who were previously fund managers at DJE Kapital AG, have contributed considerably to the industry. Their method stands out from many competitors because it cannot be replicated by an ETF. In this interview, they discuss their new fund’s strategy and offer some insights into the current market situation.
at DJE Kapital AG, have contributed considerably to the industry. Their method stands out from many competitors because it cannot be replicated by an ETF. In this interview, they discuss their new fund’s strategy and offer some insights on the current market situation.
Dr. Maximilian Köhn: Our new fund merges proven investment strategies with a dynamic, focused, and innovative approach. We remain true to our core expertise, which is classic stock-picking. We concentrate on the SkanDach region because it covers European countries with the highest level of innovation.
At the same time, proximity to companies is also important to us. We constantly engage with company management, conducting over 330 company meetings annually. This enables us to identify opportunities and risks early on, allowing our investors to benefit as well.
Can you give us an example where this approach has been particularly valuable?
René Kerkhoff: Morphosys is a great example: The apparently negative Phase III data were not initially well received by the market. However, after an exchange with the company, it turned out that the data were not as poor as the market had implied. We therefore increased our stake, and shortly thereafter, the Swiss pharmaceutical firm Novartis expressed an interest in acquisition.
Your strategy extends beyond geographical considerations, with a growing emphasis on the healthcare and technology sectors. What proportion of your portfolio do these sectors currently represent, and why have you chosen to invest specifically in these sectors?
Köhn: Our focus has significantly shifted towards the healthcare and technology sectors, which together account for approximately 50 percent of our portfolio allocation. This stems partly from our desire to continue leveraging the expertise we have developed as sector analysts for healthcare and technology at DJE Kapital. Additionally, these sectors are not only thrilling but also non-cyclical, setting them apart from many other investments. This offers a distinct unique selling point: the fund cannot be replicated through passive strategies (ETFs).
The investment industry wasn’t exactly awaiting your arrival, so why do you nevertheless think your fund is an innovative addition, and what distinguishes it from other funds?
Kerkhoff: In addition to our regional and thematic focus on underappreciated small and mid caps, plus our proven expertise, we are also committed to building a company with a long-term outlook.
That's why security, performance, and diversification are paramount to us.
You have Jan Beckers, the founder of BIT Capital, as a strong partner onboard. What does that mean to you?
Köhn: With Jan Beckers, we benefit from one of Europe's most successful investors, whose expertise, experience, and network make him a valuable partner. And this applies not only to mere market and stock analysis, but also beyond that.
What is your outlook for 2024, and what average return are you targeting over the long term?
Kerkhoff: Despite geopolitical tensions and considerable uncertainty, our outlook for 2024 remains positive. We expect interest rates and inflation to have plateaued by now, which should improve the market environment for small-cap stocks. Accordingly, small caps are expected to outperform large caps. Long-term trends indicate that small caps have historically yielded higher returns. Additionally, from a historical perspective, valuations are very favourable.
Regarding performance, we are guided, among other things, by our previous fund*, with which we were able to achieve an average annual return of over ten percent. Since the fund's inception, the performance has been very promising.
*The statement refers to the average performance of the DJE - Mittelstand & Innovation fund between 2019 and 2022.
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