Monthly Letter December 2015

The last monthly le er for the year will be a li le di erent from the usual format. As we will post our yearly le er in a few days we con ne this le er to some short comments on a few sectors and posi ons that we would like to highlight. A more detailed text on the market and how we see the opportunity set will be included in the yearly le er.

Madrague had a down month in December, -1.74%. This brings the year to date performance to +6.5%.

Sectors of note in December:

Business Service: The sector performed really well, genera ng a posi ve 70bps contribu on with a long exposure of 13% when the Eurostoxx50 declined -6.9%. Nobina, the largest Nordic bus trans- porta on company, reported strong gures which resulted in posi ve earnings revisions. They have an average contract length just shy of eight years with government backed counterparts. In this environment this should be very a rac ve and we con nue to hold the posi on. We also had long posi ons in four di erent food producers; Marfrig (meat), Marine Harvest (salmon), Scandi Standard and MHP (both chicken). All these companies show defensive characteris cs with low cyclicality and undemanding valua ons. We con nue to be holders of them going into 2016.

Construc on: The sector provided a 35bps posi ve contribu on to the fund in spite of the net long exposure. The main posi ves were Balder, Inwido and McCarthy&Stone (MCS). Balder is a Swedish property company which owns both commercial and residen al buildings. In December, Balder bought 23% of the Finnish property company Sato.

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