The SproutBridge Equity Fund’s strategy is to buy undervalued stocks on a global scale. It favors companies with moderate price-earnings ratios, manageable debt levels, demonstrable profitability over a significant historical period, conservative accounting, and other indicators that limit the risk of permanent capital loss, such as liquidation value and dividend policy.

The equity strategies in the portfolio are to select quality stocks, (deep) value stocks, and stocks that have the potential to provide a cushioning effect in a down market. By applying these strategies, the fund is expected to be less volatile – in other words, decreasing less in a down market, but also increasing less in a rising market. Because equity markets rise more often than they fall, this results in stable value growth over the long term.

The SproutBridge Equity Fund aims to achieve an average annual return of 12% (after fees) over a 5- to 10-year horizon.

We believe that the main incentive for a fund manager should be the performance fee, based on the idea of ​​“no cure, almost no pay”, so that the interests of participants and fund manager are as equal as possible.

The SproutBridge Equity Fund is set up as a performance fund, inspired by the Buffett Partnership structure that master investor Warren Buffett successfully ran in his younger years. The SproutBridge Equity Fund also has a performance fee that may only be calculated on the excess of the hurdle rate of 6% (on an annual basis)

Your money is safely stored, even if the fund manager, SproutBridge, or one of our partners were to go bankrupt. The investments of the participants are separated from the assets of SproutBridge and its partners, via the Stichting Legal Owner SproutBridge Equity Fund. This foundation is represented by an independent board from AssetCare Bewaarder Services. The Stichting Legal Owner SproutBridge Equity Fund is the legal (but not economic) owner of the fund assets and has no other duties. AssetCare Bewaarder Services also ensures that the fund manager acts in accordance with the mandate, as laid down in the Information Memorandum. You can find the Information Memorandum at the bottom of this page under ‘Documents’.

Yes, because your money is managed separately and withdrawals can only be transferred to your own fixed counter account.

A brief explanation; you transfer your money to the bank account of the Stichting Legal Owner SproutBridge Equity Fund, the independent legal owner of the fund. This bank account is therefore not in the name of SproutBridge, the fund manager. AssetCare B.V., the independent administrator of the fund, ensures that your deposit is converted into participations in the fund at the correct value on the next transaction day. AssetCare is also fully in charge of withdrawals and ensures that the correct sales proceeds of your investments are in your counter account as soon as possible. Not only your money but also the investments of the fund are in the name of Stichting Legal Owner SproutBridge Equity Fund and not in the name of the fund manager. This is required by law.

SproutBridge, the fund manager, can only perform investment transactions and cannot dispose of the fund’s assets.

The SproutBridge Equity Fund started on March 1, 2024 with the registration according to the so-called ‘Light Regime’ of the AFM (the Dutch financial markets regulator). Full registration in this phase entails disproportionately high costs for the fund, and therefore for its participants. To keep the costs in this phase limited for the participants, the ‘Light regime’ has therefore been chosen.

Both natural persons and legal entities can participate in the SproutBridge Equity Fund.

The SproutBridge Equity Fund is considered fiscally transparent for the Dutch tax authorities. This means that the fund itself is not liable to tax, but that the value of the participations is taxed at the individual participants. If you invest privately in the Fund, this capital is included in Box 3 for tax purposes for Dutch taxpayers. If you invest in the fund through a company, typically the price results of this investment will be part of the taxable result of the company.

CAGR

Stands for Compound Annual Growth Rate. This is the fund’s annualized return, after deduction of all costs. The period runs from the fund’s launch on March 1, 2024. Example of compounded return: if an investment of €100 is worth €125.44 after 2 years, it has a CAGR of 12%, because 100 plus 12% return in year 1 is €112.00 and then €112.00 plus 12% return in year 2 equals €125.44. The CAGR is shown at the top left of this website and in the fund’s factsheets.

Downward volatility

See Volatility, but for Downward Volatility only the achieved monthly negative returns over the period are included in the calculation. You can find the current downward volatility of the SproutBridge Equity Fund in the latest factsheet. The factsheets can be found on the Documents page.

High-Water Mark

The perpetual High-Water Mark prevents you from paying a performance fee on the return you have already settled on. Any negative return on your investment after a performance fee has been paid out must first be fully recovered before a performance fee is calculated again. The performance fee is calculated on the profit made compared to the High-Water Mark.

The High-Water Mark in the context of the SproutBridge Equity Fund is the highest achieved NAV per participation in a specific participation class plus the compounded hurdle rate. The hurdle rate of the SproutBridge Equity Fund is 6% on an annual basis. In practice, this means that the High-Water Mark increases by at least 0.4868% every month.

The High-Water Mark is perpetual, which means that it can never be lower than the highest achieved NAV per participation in a specific participation class. Because the High-Water Mark also increases by 0.4868% every month, the fund manager has a very strong incentive to continue performing. Every three months, if a performance fee has been calculated, the performance fee is paid to the fund manager.

Hurdle rate

The minimum required return that a fund must achieve before a performance fee can be charged. The hurdle rate of the SproutBridge Equity Fund is 6% per annum. In practice, this means that the High-Water Mark increases by 0.4868% each month.

MAR ratio

Measure of the return corrected for the risk taken over the specified period. The MAR ratio is calculated by dividing the CAGR by the Maximum drawdown. The higher the MAR ratio, the better you are rewarded for the downside risk taken. So not only a higher return contributes to a higher MAR ratio but also a lower risk taken. You can find the current MAR ratio of the SproutBridge Equity Fund in the latest factsheet. The factsheets can be found on the Documents page.

Maximum drawdown

The maximum decrease in NAV over the fund’s entire history. For example, if the NAV increases from €100 to €110 over a period, then decreases to €99 and then increases again to €105, the maximum drawdown is (110-99)/110 = -10%. You can find the current maximum drawdown of the SproutBridge Equity Fund in the latest factsheet. The factsheets can be found on the Documents page.

Series accounting

To calculate the performance fee as accurately as possible, the fund manager and administrator use the series accounting method. This ensures that each participant pays a performance fee that is actually based on the performance of his or her investment. Different series can be used to correctly administer registrations within the same participation classes, but with different start dates. For each series, the different High-Water Marks can be tracked (among other things).

For funds that do not use a technique such as series accounting, but instead calculate the performance fee at fund level, there is a chance that individual participants pay a fee that is not related to the performance of their investment.

Volatility

Volatility is the standard for risk commonly used in the financial world. Volatility expresses the degree of volatility of returns. In the case of investments, this concerns the deviation of (monthy) returns on an investment over a period compared to the average return achieved over the same period. You can find the current volatility of the SproutBridge Equity Fund in the latest fact sheet. The fact sheets can be found on the Documents page.

YTD (Return)

YTD stands for year-to-date and concerns the return on an investment from the end of the previous calendar year to the present. The YTD return is shown at the top left of this website and in the fund’s factsheets.