Quest for Growth : Semi-annual report 30 June 2021

INVESTMENT

MANAGER

REPORT

PRESS RELEASE / Regulated information

							QUEST FOR GROWTH			SCHEDULE FOR PUBLICATION:
									29 July 2021 / 5.40 PM
							SEMI-ANNUAL REPORT JANUARY - JUNE 2021			press release available at
										www.questforgrowth.com

The enclosed information constitutes regulated information as defined in the Royal Decree of 14 November 2007 regarding the duties of issuers of financial instruments which have been admitted for trading on a regulated market

Results

Quest for Growth continued its strong start to the year in the second quarter: return on equity, taking into account the capital reduction of 0.40 euros per share paid out on 30 June 2021, was 16% in the first half year. This achievement was due to profits in listed as well as unlisted participations. Net profit in the first half year of 2021 was 24.6 million euros (1.47 euros per ordinary share), compared to a loss of 2.6 million euros (-0.15 euros per ordinary share) during the first half year of 2020.

Quest for Growth's share price increased by 17.2% during the first six months of 2021. Including the above-mentioned pay out, the performance of the share was approximately 23.5%. The discount of the price in relation to the net asset value decreased to 25.3%, from 28.9% on 31 December 2020.

Market environment

European stock markets rose steadily during the first half of the year. The European stock market index STOXX Europe 600 Net Return rose by 15.2% in the first half of 2021, Small caps (STOXX Europe Small 200 Net Return) yielded an identical return. The increase was broadly based across all sectors. In particular the more cyclical sectors and those focussed on 'value', such as the automobile industry, banks and raw materials rose significantly. Defensive sectors such as real estate and insurance rose less strongly in relative terms. Only the utilities sector failed to make any progress.

Investments in listed companies

Despite the sector trends which weren't very favourable, the portfolio of listed shares achieved a sound result with an estimated performance of about 18%. Pharmagest and the Swiss company Gurit each dropped 17% and were the portfolio's biggest declines in the first half of the year. Positive highlights were Steico (+86%), Accell (+75%) and CEWE (+43%). Accell profited from the strong growth in the market for bicycles and increased its revenue by 17% last year. Steico, too, saw its sales rise by 10% in the crisis year of 2020, and expects even stronger growth in 2021. CEWE surprised the market with an increase in operating profit of almost 40%, while analysts had expected a stable to lower result.

LPKF, one of the more volatile technology shares in the portfolio, was fully sold in January. Since its purchase in May of last year, the share has risen by approximately 40%, more than twice as much as the increase in the stock market indices during the same period. Partial profit-taking also took place on shares such as Nexus, Pharmagest, Steico and LEM. Melexis was purchased on the basis of price weakness, after the placement of shares by the majority shareholder.

Investments in unlisted companies

Quest for Growth made a new investment of 1.5 million euros in REIN4CED, a company located in Leuven. This is a co-investment with the Capricorn Sustainable Chemistry Fund, a venture capital fund in which Quest for Growth also invests. Quest for Growth also made follow-up investments in NGData and Scaled Access co-investments with Capricorn ICT Arkiv.

Veracyte Inc. and the shareholders of HalioDx, a Quest for Growth portfolio company, have negotiated an agreement for Veracyte to acquire 100% of the shares of HalioDx. On the final completion of the acquisition, Veracyte would have paid around 260 million euros in total to the HalioDx shareholders, subject to customary adjustments. To take into account the risks associated with the necessary approvals, Quest for Growth applies a discount to the acquisition price when calculating the net asset value. As a result of this transaction, the net asset value of Quest for Growth increased by approximately 5.6 million euros or

0.33 euro per share. Further adjustments will be made when the transaction is finalised.

Investments in venture capital funds

The Capricorn Health-tech Fund made a follow-up investment in Mainstay Medical. In February, Diagenode was acquired by the American Hologic for 130 million euros. Together with other positive trends in Capricorn Health-tech Fund, this had a positive impact on the results of Quest for Growth amounting to more than 1 million euros. As a result of the sale of Diagenode, Capricorn Health-tech Fund made a capital reduction, with Quest for Growth receiving around 1.6 million euros. Capricorn ICT Arkiv made several follow-up investments in current portfolio companies. In April of this year, the milestone payment from Noona Healthcare related to the exit in 2018 was also received.

The Capricorn Sustainable Chemistry Fund made two new investments in the first quarter of 2021: Trillium Renewable Chemicals and REIN4CED. Trillium Renewable Chemicals develops technology to convert renewable raw materials, such as sugar or glycerol, into chemical products that are used to make many well-known consumer and industrial goods. REIN4CED, an innovative Belgian company with a production unit in Leuven, produces impact-resistant, lightweight bicycle frames for brands which, besides top performances, also want to offer their customers more safety and durability.

Black Bear Carbon ("BBC"), the Dutch technology supplier for upcycling rubber from discarded tyres into recovered Carbon Black and renewable petrochemicals, has successfully finalised an initial funding of 7.5 million euros.

Quest for Growth has committed to invest some 7.6 million euros in the Capricorn Fusion China Fund. The fund focuses on investments in companies which establish a link between the European and Chinese markets. The fund is looking for, on the one hand, innovative European companies which see a clear role for the Chinese market in their development (in sourcing, supply, production or commercialization). On the other hand, the fund will also invest in Chinese companies who want to enter the European market. The interim closing increased the fund's capital from 12,925,000 euros to 30,300,000 euros.

Prospects

Equity market valuations remain on the high side, combined with high growth expectations in the short term. After payment of the capital reduction for a total value of 6.7 million euros, a cash amount of approximately 6% of the net asset value remains. The portfolio of unlisted investments will be further expanded, while the strategy which was adjusted several years ago starts to deliver positive results.

VALUATION QUEST FOR GROWTH
Stock Price		Net asset value/share
30/06/2021	30/06/2021		31/03/2021	31/12/2020
7.62 EUR	10.20 EUR		9.88 EUR	9.14 EUR
Number of shares	16,774,226		16,774,226	16,774,226

Discount of the share price versus Net Asset Value: 25.32%

Source: Estimate by Capricorn Partners NV

EVOLUTION SHARE PRICE AND NET ASSET VALUE

60%

50%

40%

30%

20%

10%

0%

-10%

-20%

PERFORMANCE PER SHARE IN QUOTED PORTFOLIO SINCE 31/12/2020

100

90

80

70

60

50

40

30 %

20

10

0

-10-20-30

GURIT HOLDING AG-BR

PHARMAGEST INTERACTIVE

STRATEC SE

ABO WIND AG

KERRY GROUP PLC-A

FINANCIERE DE TUBIZE

TKH GROUP NV-DUTCH CERT

TECHNOTRANS SE

MELEXIS NV

MAYR-MELNHOF KARTON AG

DATRON AG

LEM HOLDING SA-REG

SAP SE

STOXX Europe 600 NR

STOXX Europe Small 200 NR

ROCHE HOLDING AG-GENUSSCHEIN

NEDAP N.V.

QfG quoted (e)

FRESENIUS SE & CO KGAA

B&C SPEAKERS SPA

JENSEN-GROUP NV

NEXUS AG

WOLTERS KLUWER

UMICORE

PSI SOFTWARE AG

CEWE STIFTUNG & CO KGAA

ACCELL GROUP

STEICO SE

FINANCIAL ASSETS BREAKDOWN

AT 30 JUNE 2021

	Shares quoted companies
				Change					in % of
				Number of		since			Valuation	Net Asset
	Company	Sector / Market		shares	31/12/2020	Currency	Share price		in €	Value
		Software & Services
	CEWE STIFTUNG	Deutsche Börse (Xetra)	62,251		-7,381	€	130.6000	8,129,981	4.75%
	PSI SOFTWARE	Deutsche Börse (Xetra)	131,283		-12,500	€	33.6000	4,411,109	2.58%
	SAP	Deutsche Börse (Xetra)	28,200		2,000	€	118.8400	3,351,288	1.96%
	WOLTERS KLUWER	Euronext Amsterdam	54,000		0	€	84.7200	4,574,880	2.67%
		Technology Hardware
	B&C SPEAKERS	Borsa Italiana	165,004		0	€	12.0500	1,988,298	1.16%
	LEM HOLDING	SWX Swiss Exchange	1,796		-425	CHF	1.940.0000	3,173,260	1.85%
	NEDAP	Euronext Amsterdam	93,148		-8,950	€	58.1000	5,411,899	3.16%
	TKH GROUP	Euronext Amsterdam	160,070		0	€	42.5400	6,809,378	3.98%
		Semiconductors
	MELEXIS	Euronext Brussels	36,289		6,000	€	87.5500	3,177,102	1.86%
		Healthcare Equipment & Services
	FRESENIUS	Deutsche Börse (Xetra)	86,000		0	€	43.9950	3,783,570	2.21%
	NEXUS	Deutsche Börse (Xetra)	56,609		-22,155	€	62.8000	3,555,045	2.08%
	PHARMAGEST INTERACTIVE	Euronext Paris	47,952		-1,000	€	92.9000	4,454,741	2.60%
	STRATEC	Deutsche Börse (Xetra)	32,495		-1,000	€	117.8000	3,827,911	2.24%
		Pharma & Biotech
	ROCHE	Euronext Brussels	14,500		0	CHF	348.5500	4,602,892	2.69%
	TUBIZE	Euronext Brussels	61,588		3,000	€	85.3000	5,253,456	3.07%
		Electrical & Engineering
	ABO WIND	Deutsche Börse (Xetra)	105,715		-4,285	€	45.7000	4,831,176	2.82%
	ACCELL GROUP	Euronext Amsterdam	105,000		20,000	€	45.3000	4,756,500	2.78%
	DATRON	Deutsche Börse (Xetra)	119,000		0	€	9.9500	1,184,050	0.69%
	JENSEN GROUP	Euronext Brussels	152,876		0	€	29.6000	4,525,130	2.64%
	TECHNOTRANS	Deutsche Börse (Xetra)	122,354		-16,392	€	27.3000	3,340,264	1.95%
		Materials
	GURIT	SWX Swiss Exchange	2,031		-300	CHF	2.020.0000	3,736,448	2.18%
	KERRY GROUP	Euronext Dublin	39,000		6,500	€	117.8000	4,594,200	2.68%
	MAYR-MELNHOF KARTON	Deutsche Börse (Xetra)	15,000		0	€	179.6000	2,694,000	1.57%
	STEICO	Deutsche Börse (Xetra)	75,022		-46,470	€	110.6000	8,297,433	4.85%
	UMICORE	Euronext Brussels	65,000		-15,000	€	51.5000	3,347,500	1.96%
									107,811,510	62.99%
Shares unquoted companies
				Change since						in % of
Company	Sector / Market	31/12/2020	Currency	Valuation in €	Net Asset Value
	HALIODX	Pharma & Biotech				€	8,580,344		5.01%
	MIRACOR	Healthcare Equipment & Services				€	2,849,932		1.67%
								11,430,277		6.68%
				Change since						in % of
Co-investments Capricorn Funds	31/12/2020	Currency	Valuation in €	Net Asset Value
	C-LECTA	Materials				€	5,166,929		3.02%
	ECLECTICIQ	Software & Services				€	2,000,000		1.17%
	NGDATA	Software & Services	234,556		€	1,430,094		0.84%
	PROLUPIN	Materials				€	2,048,544		1.20%
	REIN4CED	Materials	1,499,997		€	1,499,997		0.88%
	SCALED ACCESS	Software & Services				€		368,699		0.22%
	SENSOLUS	Software & Services				€		690,939		0.40%
								13,205,201		7.71%

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Investments in Venture Funds

			Last		in % of
	Change since		Valuation		Net Asset
	31/12/2020	Currency	Date	Valuation in €	Value
CAPRICORN PARTNERS
CAPRICORN CLEANTECH FUND		€	30/06/2021	1,510,931	0,88%
CAPRICORN DIGITAL GROWTH FUND		€	30/06/2021	3,099,272	1,81%
CAPRICORN FUSION CHINA FUND	1,893,750	€	30/06/2021	1,622,300	0,95%
CAPRICORN HEALTH-TECH FUND	-1,650,000	€	30/06/2021	7,078,813	4,14%
CAPRICORN ICT ARKIV		€	30/06/2021	5,048,322	2,95%
CAPRICORN SUSTAINABLE CHEMISTRY FUND	2,000,000	€	30/06/2021	8,550,976	5,00%
THIRD PARTY FUNDS
CARLYLE EUROPE TECHNOLOGY PARTNERS II	-8,432	€	31/03/2021	65,642	0,04%
LIFE SCIENCES PARTNERS III		€	31/03/2021	325,000	0,19%
LIFE SCIENCES PARTNERS IV		€	31/03/2021	917,000	0,54%
				28,218,256	16,49%
Total Financial Assets - Shares		€		160,665,243	93,87%
Change in valuation in unquoted companies and venture funds		€		0	0,00%
Total Financial Assets - Shares after depreciation		€		160,665,243	93,87%

Amounts receivable Companies

			Last		in % of
	Face value in	Change since	Valuation		Net Asset
COMPANY	currency	31/12/2020	Date	Valuation in €	Value
LOAN NOTES
SCALED ACCESS	458.000	358.000	€	458,000	0.27%
				458,000	0.27%
Total Financial Assets - Amounts receivable			€	458,000	0.27%
Total Financial Assets			€	161,665,243	94.13%
Cash			€	9,462,312	5.53%
Other Net Assets			€	578,573	0.34%
Quest for Growth - Ordinary shares			€	-	0.00%
Total Net Asset Value			€	171,164,128	100.00%

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PORTFOLIO COMPOSITION AND MARKET CAPITALISATION AT 30 JUNE 2021

€ 180,000,000	16.45%
€ 160,000,000	14.66%
€ 140,000,000	62.99%

• 120,000,000
• 100,000,000
• 80,000,000
• 60,000,000
• 40,000,000

€ 20,000,000

5.87%

€ 0

Cash +	Quoted portfolio	Unquoted portfolio	Venture funds	Market cap
Other net assets

TOTAL SHAREHOLDERS RETURN (SINCE 30/06/2011)

Source: Bloomberg

QUEST FOR GROWTH RESULTS FROM 1 JANUARY 2011 UNTIL 30 JUNE 2021

140,000,000

																		16.09%
120,000,000
100,000,000										20.3%					12.43%
											14.02%
80,000,000
							34.5 %
60,000,000									-0.3 %			-18.35%
40,000,000						7.9 %
20,000,000				17.4 %
-			17.2 %
2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
-20,000,000		-12.1 %

PORTFOLIO

DISTRIBUTION

BY CURRENCY

EUR

93.22%

USD

0.02%

CHF

6.76%

PORTFOLIO

DISTRIBUTION

BY SECTOR

		Health Care
		Equipment &
Semiconductors	Services
10.8%	Pharma &
1.9%
Technology			Biotech
		10.8%
Hardware
10.2%
				Electrical &
				Engineering
Software &				10.9%
Services
14.8%
Cash & other net			Materials
assets	Funds &			18.3%
5.9%

Diversified

Companies

16.5%

PORTFOLIO

DISTRIBUTION

BY COUNTRY

	Italy
Switzerland	1.2%
7.1%	Belgium
31.3%

Ireland

2.9%

France 8.1%

United Kingdom

0.0%

Netherlands

15.4%

Germany 33.9%

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ADDED VALUE PER SHARE

(January - June 2021)

ADDED VALUE PER SECTOR PER SHARE

HEDGE

GAINS AND

11,00

PORTFOLIO

LOSSES

Share/

10,50

10,00

NAV

9,50

9,00

8,50

8,00

NAV 31/12/2020

Technology Hardware

Pharma & Biotech

Funds & Diversified Companies

Software & Services

Electrical & Engineering

Other sectors

Semiconductors

Materials

Health Care Equipment & Services

Depreciation unquoted companies and venture capital…

Currency hedging

Financial profits & losses

Expenses

Capital decrease

NAV 30/06/2021

ADDED VALUE PER SEGMENT PER SHARE

NAV / Share

11,00

10,50

10,00

9,50

9,00

8,50

8,00

NAV 31/12/2020

Quoted companies

Unquoted companies

Funds

Not assigned

Financial profits & losses

Expenses

Capital decrease

NAV 30/06/2021

PROFILE

QUEST FOR GROWTH, is a privak/pricaf, a public alternative investment fund (AIF) with fixed capital under Belgian law, managed by Capricorn Partners NV. The diversified portfolio of Quest for Growth is for the most part invested in growth companies listed on European stock exchanges, in European unquoted companies and in venture capital funds. Quest for Growth focuses on innovative companies in areas such as digital technologies (ICT), technologies for the healthca-re sector (Health‐tech) and clean technology (Cleantech). Quest for Growth has been listed on Euronext Brussels since 23 September 1998.

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