A highlight this month was our investment in Dell Technologies Inc. The company has benefited from the surge in demand for IT hardware and software solutions reflecting the increase in work from home trends stemming from the pandemic. In addition, the management team recently updated investors regarding long term business targets for the company and related capital allocation plans. The latter included a strong commitment to low financial leverage which is of course music to a lender’s ears. This caused the value of the company’s bonds to rise.

We were also pleased to receive an earnings update from Golden Goose – the Italian based branded footwear business we recently made an investment in. The company, with sales in over 70 countries, continues to grow strongly, reflecting its considerable brand strength. Pleasingly, the company also increased the share of its revenue that comes from sales direct to consumers (which are higher margin relative those sold through third party channels). Unsurprisingly, their bonds were in strong demand post the earnings update which caused their price to rise.

Closer to home, despite the COVID related lockdown, TR Group came to market with a new wholesale bond issue. The cash raised will help fund the ongoing growth of its business. As keen supporters of the company, we invested in the new bond, which saw strong demand. We expect the company to go from strength to strength in the years ahead – reflecting its ability to deliver the right truck, in the right condition for its customers.

A lowlight for the fund was our investment position in Banca Monte dei Paschi di Siena (‘Monte’). As mentioned last month, UniCredit, a competing Italian banking group, announced that it is considering an acquisition of Monte subject to certain conditions. Local press reports suggested the deal may not proceed, causing investors to reassess Monte’s risk return proposition. We continue to monitor this investment closely, remain engaged with the bank’s executive team, and are comfortable with the bank’s stand-alone business and balance sheet profile.