The market is trying to time the end of the monetary easing and to avoid to price in the rising political risks.
Our investments acquired in the past years continue to appreciate. The excellent performance of our portfolio in the first half comes from our 2017 investment in a distributor on the verge of a major acquisition. Unfortunately, the desired merger did not happen. We suffered a sharp depreciation in 2017 on this position. Despite this, we have maintained our investment based on the potential of its gross margins. The intervention of an activist allowed us to resell our position in 2018 with more than adequate profit taking into account the current difficulties in the sector.
We initiated a small position on a clothing company awaiting a needed increase in capital and a return to reasonable growth after restructuring.
Markets are less bullish than in the past, which slowed our profit-taking process and stabilised the investment exposure in our portfolios.
Investment opportunities are still rare. The upsurge in volatility is opening up windows of investment in some companies that have been neglected after several quarters of poor results and that are beginning a deep restructuring of their activities.