Silvercrest
Europe High Conviction

EUROPEAN MARKET REVIEW AND FUND PERFORMANCE

The European equity market returned -4.0% in March (MSCI Europe TR) and Small and Mid-Cap stocks measured by the MSCI Europe SMID returned -2.9%.

After two months of positive returns, European equity markets corrected in March due to investors’ cautiousness ahead of US tariffs announcement, the direct and indirect impacts of those tariffs on companies and on the economy.

In Germany, a new fiscal package was announced and voted, consisting of a EUR500bn Infrastructure fund, defence spending and a relaxation of the debt brake. That spending spurge is a turning point for Germany after decades of fiscal conservatism in hopes of reviving economic growth. The European Commission also announced a new plan, named Rearm Europe, enabling spending of over EUR800bn for European defence. This plan aimed at bolstering European military capabilities : the plan is a response to the rapidly changing geopolitical landscape with a range of escalating threats and challenges.

In that context, the top performers in the MSCI Europe were Thales, Dassault Aviation and Leonardo, while Kering, Melrose Industries and Amplifon were the worst performers.

By sectors, Utilities and Energy performed the best, up +5,1% and +4,2% respectively while Consumer Discretionary and Information Technology were the worst performers, down 12.4% and 9.5% respectively.

The Fund returned -5,5% in March (NA share class) versus -4.0% for its benchmark.

In March, our top three positions minus our bottom three positions had a net +8 bps impact.

STOCK PERFORMANCE: TOP CONTRIBUTORS AND DETRACTORS

CONTRIBUTORS

The top three contributors to the Fund’s performance in March were Prudential, SPIE and Banca Mediolanum.

Prudential: Prudential is a leading life insurance and asset management company with a peerless franchise in Asia (ex-Japan). The stock was up 13.8% (EUR) in March. The company reported strong FY 2024 results with an operating profit, a dividend per share and total capital higher than expected.

SPIE: SPIE is the independent European leader in multi-technical services in the areas of energy and communications. The company reported strong FY results and unveiled a strong mid-term financial guidance. The stock was up 14.8% in March.

Banca Mediolanum: Banca Mediolanum is a bank and an asset gatherer in Italy and in Spain. The stock was up 9.4% in March after positive reports published by sell-side analysts.

DETRACTORS

The three positions that detracted most from the Fund’s performance in March were Novo Nordisk, Galderma and Inficon.

Novo Nordisk: Novo Nordisk is a leading global healthcare company with a focus on diabetes and obesity. The stock was down 25.9% in March. The company Novo Nordisk published new clinical data (REDEFINE 2) on its investigational drug cagrisema and if those new clinical data were positive they were below expectations.

Galderma: Galderma is a dermatology company. The stock was down 16.4% in March after the company reported FY 2024 results and a softer than expected Q4 in Aesthetics division due to US market weakness. However, 2025 guidance is strong and the company mentioned market share gains globally and new potential markets.

Inficon: Inficon provides world-class instruments for gas analysis, measurement and control to the semi- conductor industry . Inficon declined by 17.5% as the all semi-conductor space suffered from uncertainty around tariffs on semiconductor equipment tariffs.