Kempen Global

Small-cap
Review Q1 2021

APRIL 2021
General provisions

Kempen Capital Management N.V. (Kempen) is a specialist Asset Management company – a strong player in its niche markets. We focus on a select
group of strategies that place us among the top of our international league in Small-caps, Real Estate, Dividend Equities, Fixed Income and Hedge
Fund Solutions. We are passionately committed to building long-term partnerships based on transparency and trust and we consider our clients’
goals as our goals, which is why Kempen and our employees invest in our funds right along with you.

Small-caps: general risks to take into account when investing in small-cap strategies
Please note that all investments are subject to market fluctuations. Investing in a small-cap strategy may be subject to country risk, equity market
risks and small cap company risk, which could negatively affect the performance. Under unusual market conditions the specific risks can increase
significantly. Potential Investors should be aware that changes in the actual and perceived fundamentals of a company may result in changes for the
market value of the shares of such company. Equities of companies with small capitalization can be more volatile than equities of mid and large
companies and may also be less liquid.

The value of your investment may fluctuate, past performance is no guarantee for the future. Do not take unnecessary risks. Before you invest, it is
important that you are aware of and are informed about the characteristics and risks of investing. This information can be found in the available
documents of the strategy and/or in the agreements that are part of the service you choose or have chosen.

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General provisions

Profile of the typical investor in small-cap strategies:

The strategy may be suitable as a core or supplemental investment for those:

- interested in a convenient way of gaining exposure to small-cap companies and to (international) equity markets;
- seeking long-term growth of their investment (5 years or longer);
- who can bear the possibility of significant losses, especially in the short term; and
- who have experience with the risks and rewards of equity investing.

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Summary

Review: Strong relative and absolute Q1 2021 performance

– Many of our companies came out of the crisis stronger and reported solid Q4 2020 results
– Q1 2021 gross performance of 23.2% vs. 13.9% for the benchmark benefitted from a style tailwind (EUR)
– Strong gross performance in market recovery of 86.6% since Q1 2020 correction vs. 69.4% for the benchmark
– Solid long-term track record vs. benchmark and peers

Outlook: Remain focused on bottom-up stock selection

– To protect existing shareholders Kempen has decided the strategy reached the soft-close status as of April 1st, 2021
– Opportunity to add value by stock selection given extreme valuation dispersion
– Portfolio of higher quality and more attractively valued companies than the benchmark
– High active share, no top-down bets on regions or sectors

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Agenda

1. Review

2. Outlook

3. ESG

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Review: Strong relative and absolute Q1 2021 performance

Strong Q1 2021 contributing to long-term track record

– Some of the names which we moved to maximum weight in the portfolio in 2020 reported strong quarterly results
– The relative performance over all time periods (1-,3-,5-year, inception) shows consistent outperformance versus our benchmark
– The strategy has experienced significant growth in its Assets Under Management, reaching €1.6 billion by quarter end
– To protect existing shareholders Kempen has decided the strategy reached the soft-close status as of April 1st, 2021

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Strong Q1 2021 contributing to long-term track record

Q1 2021 return vs benchmark and value index 5-year annualized return vs benchmark and value index
25% 23.2% 20%

16.8%
20%
17.7% 15%
12.9%
15% 13.9%

10% 9.4%

10%

5%
5%

0% 0%
Kempen Global Small-cap MSCI World Small-cap MSCI World Small-cap Kempen Global Small-cap MSCI World Small-cap MSCI World Small-cap
fund (gross return) index (benchmark) Value index fund (gross return) index (benchmark) Value index

The value of your investment may fluctuate. Past performance is no guarantee for the future.
Source: JP Morgan, KCM, 31/03/2016 to 31/03/2021, returns before costs in EUR

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Strong participation in recovery after Q1 2020 correction

Performance style bridge Q1 2020 Performance style bridge Q2 2020-Q1 2021

0% 100%
90% 86.6%
-10%
80%
69.4% +19.8%
70% -2.6%
-20%
60%
-30% -28.4% +0.0% 50%
-4.9% -33.4% 40%
-40%
30%
20%
-50%
10%
-60% 0%
MSCI World Small MSCI World Small Value Stock Selection Kempen Global Small-cap

The value of your investment may fluctuate. Past performance is no guarantee for the future.
Source: JP Morgan, KCM, 31/03/2020 to 31/03/2021, returns before costs in EUR

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Strong stock selection in Consumer and IT in Q1 2021

Relative sector weights as per period end Sector attribution vs MSCI World Small Cap

Communication Services Communication Services Allocation

Effect
Consumer Discretionary Consumer Discretionary Selection
Consumer Staples Consumer Staples Effect

Energy Energy
Financials Financials
Health Care Health Care
Industrials Industrials
Information Technology Information Technology
Materials Materials
Real Estate Real Estate
Utilities Utilities
Cash Cash
Total

-12% -8% -4% 0% 4% 8% 12% -4.0% 0.0% 4.0% 8.0% 12.0%

Source: Factset, gross returns, EUR, from 31/12/2020 to 31/03/2021. This is an indicative gross performance figure that can deviate slightly from the actual performance of the strategy.

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Strong stock selection in North America in Q1 2021

Relative region weights as per period end Region attribution vs MSCI World Small Cap

Allocation
Europe Europe Effect
Selection
Effect
Japan Japan

North America North America

Other Other

Cash Cash

Total Total

-12% -8% -4% 0% 4% 8% 12% -4% 0% 4% 8% 12%

Source: Factset, gross returns, EUR, from 31/12/2020 to 31/03/2021. This is an indicative gross performance figure that can deviate slightly from the actual performance of the strategy.

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 Performance contribution analysis Q1 2021

Top-10 contribution Bottom-10 contribution

Teradata [84%] 2.7% -0.1% HELLA [-10%]

Abercrombie & Fitch [76%] 1.7% -0.1% Hikma Pharmaceuticals [-4%]

Sleep Number [83%] 1.6% 0.0% Nohmi Bosai [-6%]

Dialog Semiconductor [44%] 1.4% 0.0% Kojamo [-6%]

Jabil [28%] 0.9% 0.0% TAG Immobilien [-6%]

Thermon Group [30%] 0.9% 0.0% Hibernia [-3%]

Brunswick [31%] 0.9% 0.0% LHC Group [-6%]

Haseko [30%] 0.9% 0.0% Nissin Electric [-13%]

Bed Bath & Beyond [114%] 0.9% 0.0% First Solar [-9%]

Western Forest Products [50%] 0.7% 0.0% ULVAC [2%]

0% 1% 2% 3% -3% -2% -1% 0%

Company Name [Return in %]
Source: FactSet, FactSet backward-looking contribution smoothing algorithm applied, (gross) returns in brackets, EUR, from 31/12/2020 to 31/03/2021

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Portfolio activity in 2020 and Q1 2021

Portfolio activity per year Examples of new investment ideas in 2020 and Q1 2021
2017 2018 2019 2020 2021

Buy – new investment idea 11 12 9 10 2

Buy – recycled investment idea 3 6 2 1 0

Buy – new real estate investment 2 5 3 4 1

Exit – price target reached 7 4 7 3 1

Exit – better idea/change inv. case 2 4 10 11 0

Exit – acquired (M&A) 3 5 1 3 0

Exit – real estate divestment 2 5 3 5 0

Net change 0 +6 -7 -7 2

Total number of stocks 70 76 69 62 64

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Takeovers in the portfolio over the years

Since inception 25 companies in the Kempen Global Small-cap strategy received a take-over bid

Year M&A Target Buyer Premium

2021 Dialog Semiconductor Renesas 20%

2020 Hitachi High Tech Hitachi 68%***
TCF Financial Corporation Huntington Bancshares 12%
Tech Data Apollo Global Management 30%*
Toshiba Plant Systems & Services Toshiba Corp 27%**
2019
Texas Capital Bancshares Independent Bank Group 6%
Dairy Crest Group plc Saputo 12%
DCT Industrial Trust Prologis 16%
2018 Fogo de Chao Rhône Capital 26%
Validus Holdings AIG 46%
* Final bid was 30% more than the price of Tech Data’s stock before Reuters reported in mid-October that Apollo offered $5 billion for the company.
** Take-over premium calculated on the share price levels prior to rumors that were published 2 days before the official bid.
*** Take-over premium calculated on the share price levels prior to rumors that circulated initially on 6th of June 2020.
Source: Factset, company press releases, 31/03/2021. The value of your investment may fluctuate. Past performance is no guarantee for future results.

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Modern portfolio management in 2020
Number of (virtual) company contacts up versus 2019

96
83
61
302 285 34
77 95
42
131 21
75 Europe

Japan
North America

6
3
company contacts 2 2
financial model updates
general updates Rest of World
ESG voting and updates

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Strong track record
Figures are gross performance in EUR; the effect of potential fees and charges is not included. The level of the fees and charges will depend on the
applied product structure, this will have effect on the net performance.

Investment return (base 100 in June 2014)* Performance (%)**

Kempen Global Small-cap Strategy MSCI World Index Small Cap 100 86.6
80 69.4
280 60
260 40 23.2 23.2
16.8 12.9 16.1 13.2 13.9 13.9
20 14.9 11.9
240
0
220
Inception 5 Years 3 Years 1 Year YTD 3 Months
200
Kempen Global Small-cap Strategy MSCI World Index Small Cap
180
160 40
27.3 27.828.5
140 30
20 16.1 13.7
120 12.6 11.0 7.7 6.4
10
100 0.8
0
80
2014 2015 2016 2017 2018 2019 2020 -10 -4.7
-9.5
-20
2015 2016 2017 2018 2019 2020

Source: Kempen. *Performance figures based on a representative account before fees as at 31 March 2021. **Annualised figures
The value of your investment may fluctuate. Past performance is no guarantee for future results.

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Reconciliation gross returns to net returns

Gross and net returns of strategy and various share classes*

3 Months 1-year 3-year 5-year Since

(annualized) (annualized) inception
(annualized)

Kempen Global Small-cap strategy, gross return 23.2% 86.6% 16.1% 16.8% 14.9%

Kempen (Lux) Global Small-cap Fund (I), net return 22.9% 84.9% 15.1% 15.8% 13.9%

Kempen (Lux) Global Small-cap Fund (BN), net return 22.9% 84.8% 15.0% 15.7% 11.9%

Benchmark (MSCI World Small Cap Index) 13.9% 69.4% 13.2% 12.9% 11.9%

* EUR returns. The value of your investment may fluctuate. Past performance is no guarantee for the future.
Source: JP Morgan, KCM, 31/03/2021, since inception runs from 07/08/2014 to 31/03/2021

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Performance driven by stock selection since inception

Sector attribution vs MSCI World Small Cap Region attribution vs MSCI World Small Cap
Communication Services
Consumer Discretionary Other

Consumer Staples
Energy
Japan
Financials
Health Care
Industrials Europe
Information Technology
Materials
North America
Real Estate
Utilities
[Cash] Total
Total

-10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Allocation Effect Selection Effect Allocation Effect Selection Effect

Source: Factset, gross returns, EUR, from 11/7/2014 to 31/03/2021

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Q1 2021 was a strong quarter for small-caps and value

2019 2020 2021 Q1

30% 28.5% 10% 25% 23.2%
+3.0% 27.5%
6.4% 20% 5.5%
25%
-4.0% 5%
15% 13.9% 3.8%
20%
+6.3% 0.8% 10%
15% 0%
5%
10%
0%
-5%
5% -11.9%
-5%

0% -10% -10%
MSCI World Small MSCI World Small Value Stock Selection Kempen Global Small-cap

The value of your investment may fluctuate. Past performance is no guarantee for the future.
Source: JP Morgan, KCM, 01/01/2019 to 31/03/2021, returns before costs in EUR

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Agenda

1. Review

2. Outlook

3. ESG

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Outlook: Remain focused on bottom-up stock selection

Opportunity to add value by stock selection given still substantial valuation dispersion
– Portfolio holdings on average are higher quality, have healthier balance sheets and are more attractively valued versus the benchmark
– The strategy continues to have a high active share and has no large top-down bets on regions or sectors
– The strategy’s long-term value investing style differentiates us from many peers
– Since Q4 2020 the pronounced 3-year rolling performance gap between value and growth stocks has started narrowing

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Portfolio: higher quality and more attractively valued

High quality* Healthy balance sheets** Attractive valuation***

20% 2.0x 20x

1.5x
15% 15x

1.0x

10% 10x

0.5x

5% 5x
0.0x

0% -0.5x 0x
ROCE Net Debt / EBITDA P/E (FY2)

Portfolio Benchmark Portfolio Benchmark Portfolio Benchmark

Source: Kempen, FactSet, 31 March 2021, * Weighted average and excludes financials and real estate and values <-100% and >100% ,
** Weighted average and excludes financials and real estate and companies with EBITDA <0 and values <10 and >10, *** Harmonic weighted average and excludes values >100 and <0

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High active share, no top-down bets on regions or sectors

Geographic diversification Sector diversification

Communication Services [5%, BM: 3%]
Consumer Discretionary [17%, BM: 14%]
Consumer Staples [1%, BM: 4%]
North America [54%, BM: 63%]
Energy [3%, BM: 3%]
Europe [27%, BM: 21%] Financials [14%, BM: 14%]
Japan [15%, BM: 10%] Health Care [5%, BM: 12%]

Other [2%, BM: 6%] Industrials [18%, BM: 19%]

Information Technology [17%, BM: 13%]
[Cash] [2%, BM: 0%]
Materials [8%, BM: 7%]
Real Estate [10%, BM: 9%]
Utilities [0%, BM: 2%]
Cash [2%, BM: 0%]

Source: Kempen, FactSet, 31 March 2021, BM = Benchmark

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Small-caps and value rebounded from lows in Q4 2020

3-years rolling annualized return small-cap minus large-cap* 3-years rolling annualized return small-cap value minus growth**
20% 20%

15% 15%

10% 10%

5% 5%

0% 0%

-5% -5%

-10% -10%

-15% -15%

-20% -20%
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Source: Kempen, FactSet, 31/05/1994 – 31/03/2021, *MSCI World index (large-caps) versus MSCI World Small cap index (small-caps), MSCI World Small cap ACWI (1994 – 2001 ) & MSCI World Small cap (2001 – 2021)
**MSCI World Small Value index (small-cap value) versus MSCI World Small Growth index (small-cap growth)

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Long-term value style differentiates us from peers

Count of Morningstar peers per style box* Holdings-based style trail**

Kempen (Lux) Global Small-cap

MSCI World Small-cap index
Large

01 00 21 Average Morningstar peer group

Mid

02 116 36
14
Small

617 30
21 21
5

Value Core Growth

* Kempen Global Small-cap strategy is currently classified as “Small Value” by Morningstar Direct per 31/12/2020 ** Time period: 31/1/2016 to 31/12/2020
Source: Morningstar Direct

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Significant growth in Assets under Management (EURm)

1,562

1,085

619
488
327
151
6 10 24

Inception Jul- Jul-15 Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Dec-20 Mar-20
14

Source: J.P. Morgan, Kempen, 3/31/2021

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Agenda

1. Review

2. Outlook

3. ESG

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Strategy is suitable for sustainable client portfolios

Exclude Integrate Engage

Screen to exclude companies that are not Determine Kempen ESG score (1-5) based Unlock value and reduce risk through
sustainable on strict sustainability criteria continuous engagement and voting

1. 2. 3. 4.
Screening Quickscan Fundamental analysis Ownership
(± 4000 companies) (± 500 companies) (± 100 companies) (60-90 companies)

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Engagement overview Q1 2021
Company Ongoing engagement cases in Q1 2021 Strategy Environmental Social Governance

Argo Argo held investor day in line with our recommendations (content, timing, targets)
Micro Focus Engaged on several voting items regarding renumeration and board composition
Optorun Engaged on various ESG topics and identified room for improvement
Kojamo Engaged on board compensation voted against ISS to keep experienced board
Luxfer Provided feedback and gap analysis on Luxfer’s sustainability report
Software AG Engaged on communication, capital allocation and other governance issues
Jabil MSCI ESG rating upgraded to BBB, organized call with head of ESG to discuss climate change
Fujitec Milestone 3 after the capital markets day, continued engagement via letters and calls
Otello Voted for renumeration program after engagement with management
Stabilus Raised awareness on the importance of ESG and ESG ratings
Koito Engaged on shareholder communication, corporate governance and disclosure
Delek US Engaged on GHG reduction strategy and targets
Thermon Engaged on communication, financial reporting and sustainability
Ulvac Shared a capital allocation model with the company that can create significant value
DeNA Sent letter to incoming CEO with our strategic views. Letter led to an invitation to speak to CEO
ANF Continued engagement on capital allocation. Additionally, we connected CFOs SNBR and ANF
EnerSys Engaged on communication and sustainability

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No exposure to MSCI ESG controversy flags,
UNGC Fail & Watchlist companies or controversial sectors
MSCI ESG controversy flags UNGC status Controversial sectors*
Non-controversial sectors 96.3%100%
92% 36.3% Gambling - operations
Green 0.9%
92.5% Pass Thermal Coal Power Generation
98.6% 0.6%
Weapons 0.6%
4% Coal Reserves 0.3%
Yellow Alcohol Production 0.3%
5.4% 0.0%
Watch List Nuclear Energy 0.2%
0.9% Tobacco Retail 0.2%
0% Tobacco Distribution 0.2%
Orange
1.8% Tobacco Production 0.1%
0.0% Alcohol Retail 0.1%
Fail Alcohol Distribution
0% 0.1% 0.1%
Red Thermal Coal Mining 0.0%
0.1% Adult Entertainment - distribution 0.0%
Adult Entertainment - retail 0.0%
3.7%
4% Unrated Gambling - licensing 0.0%
Unrated 0.5% Labor rights controversy
0.2% 0.0%
Bribe controversy 0.0%
Strategy Benchmark

*Includes companies obtaining a material share of revenue from stated sectors (Weapons >15%, Alcohol >20%, other sectors >5%)
Source: MSCI ESG Research, ISS-ESG research, 31/12/2020. Portfolio as of 31/3/2021.

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ESG ratings and risk category

MSCI ESG ratings Sustainalytics Risk

AAA 3% 1%
2% Negligible
1%
AA 6%
13% 41%
Low
28% 28%
A
21%
40%
BBB 30% Medium
26% 38%

BB 19% 15%
22% High
23%
B 9%
13% 2%
Severe
0% 8%
CCC
1%
1%
5% Unrated
Unrated 3%
2%

Strategy Benchmark

Source: MSCI ESG Research, Sustainalytics, 31/3/2021

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Less carbon intensive portfolio than the benchmark

Carbon intensity* per sector Portfolio carbon intensity*

Utilities 0
2084 177
Materials 488
652
Energy 177
593
Consumer Staples 42
123
198 114
Industrials 118
Real Estate 169
102
Health Care 69
77
Consumer Discretionary 35
56
Information Technology 35
44
Communication Services 15
27
Financials 5
13
Overall carbon intensity
Strategy Benchmark
* Defined as weighted average emission intensity [Scope 1 & 2 emission (tCO2) divided by sales (EUR)] ** The strategy has no allocation to the utilities sector
Source: ISS Ethix data Reported emissions and sales data as of 31/12/2019. Holdings as of 31/03/2021

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Carbon emission development and targets – GSC
Comments
CO2e per EUR m invested (CO2/EV) Weighted Average Carbon Intensity (WACI)
– Overall: Portfolio carbon intensity improved in 2020. We engage with highest carbon contributors:
– Befesa: Monitoring the company’s progression on ESG targets 2020* 2019* Delta 2020* 2019* Delta
– Cabot: Engagement on GHG reduction targets, scope 3 disclosure and management alignment Portfolio 79 129 -50 115 153 -38
– Delek US: Engagement on decarbonization strategy and GHG reduction targets
Benchmark 89 87 2 173 176 -3

Delta -10 42 -52 -58 -23 -35

Carbon emission per EUR m Sales (CO2e / Revenues)** Issuer name Sector Contribution to Portfolio Weight (%)
portfolio CO2e per
200 EUR Revenues
180
153 1. Befesa Industrials 22.1% 2.5%
160
140 2. Cabot Materials 16.8% 1.2%
115
120 3. West Fraser Materials 12.0% 3.0%
100
4. Delek US Energy 4.6% 1.7%
80
60 5. Vesuvius Industrials 4.3% 2.2%

40 6. CoreSite Realty Real Estate 4.0% 0.9%

20
7. First Solar IT 3.2% 2.1%
0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 8. Kronos Worldwide Materials 2.8% 2.1%

GSC Objective / ambition BM 9. Killam Apartment Real Estate 2.3% 0.9%

Actual BM (dashed line) EU CTB 10. Trinity Industrials 1.9% 1.6%

Total Top 10 74.1% 18.2%

* CO2e: based on 2018 and 2019 carbon data (scope 1 & 2), portfolios as at 12/31/2020 and 12/31/2019 respectively.
** GSC: objective 2025 to be below EU CTB. BM: MSCI World Small Cap (reduction 7% p/y on average).
EU CTB: EU Benchmark (start position 30% lower than benchmark and reduction on average 7% p/y).
Befesa: zinc recycling

– Befesa is at heart a circular economy company

– European market leader in recycling zinc from steel dust
– Steel dust is a byproduct of steel production from scrap steel
– Steel dust is hazardous waste that is not allowed to be dumped in landfills
– Befesa recovers zinc from steel dust so that it can be reused
– Chinese growth opportunity: first local recycling facilities being built by Befesa
– For more on Befesa click here

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First Solar: solar panel manufacturer

– Solar power will need to expand materially to reach Paris Agreement ambitions
– First Solar is a global top 10 solar module manufacturer
– The company is the only large scale global producer of thin film solar modules
– Thin film has an up to 6 times lower carbon footprint than competing technologies
– Water usage is up to 24 times less than competing technologies
– For more on First Solar click here

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Disclaimer
Kempen (Lux) Global Small-cap Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), is domiciled in Luxembourg. This Fund is authorised in Luxembourg and is
regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management
company and regulated by The Netherlands Authority for the Financial Markets. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.
The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents of the Fund are
available at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg and on the website of KCM (www.kempen.com/investmentfunds).
The Sub-fund is registered for offering in a limited number of countries. The countries where the sub-fund is registered can be found on the website. The value of your investment may fluctuate.
Past performance provides no guarantee for the future.

ASSE T MANAGE ME NT \ 34