CARNEGIE FONDER PRESENTATION Nordnet - November 2013 Carnegie Fonder AB
CARNEGIE FONDER PRESENTATION Nordnet - November 2013
Carnegie Fonder AB
WHO WE ARE
Carnegie Fonder AB
Mikael Engvall
Institutional sales with Emerging Market Focus. Mikael has covered the
Russian Market since 1996, initially with HQ Bank and since 2010 with
Carnegie Investment Bank.
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Niklas Edman
Portfolio Manager Fixed Income. Niklas has worked in the financial
industry since 2007, with corporate finance at Carnegie Investment
Bank and as investment manager at Armada Mezzanine Capital.
CARNEGIE FONDER IN SUMMARY
Founded 1988
EUR 4.5 billion in AuM
Focus on Nordic Fixed Income and Nordic Equities and Emerging Markets
Institutional clients, insurance companies and distributors, private clients
Over 300,000 end clients
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INVESTMENT PHILOSOPHY
Active management without restrictions
with regard to company or sector with
the aim of generating a positive and
stable return
Concentrated portfolios – about 30
holdings of shares with good liquidity
Value management of assets considered
to be undervalued based fundamental
analysis
Through our investment philosophy, our
aim is to generate returns with lower
overall risk than our competitors
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FUNDS ON EMERGING MARKETS
Carnegie Emerging Markets 1996
Carnegie Rysslandsfond 1997
Carnegie Kinafond 2004
Carnegie Indienfond 2004
Carnegie Afrikafond 2006
__________________________________
About EUR 1.0 billion in emerging markets funds
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CARNEGIE RYSSLANDSFOND November 2013
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RUSSIAN MARKET
The world sixth largest economy
The world largest oil- and gasproducer
The world fourth largest currency reserves
Russian equity market – attractive valuations
– PE ratio around 5
– 50% discount to other emerging markets
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Discount for a reason
– Increased tension between Putin and Medvedev
– Increased tension between Russia and USA
– Weaker Corporate Governance (TNK BP/ Rosneft)
– Global concerns towards Russia
– Dependent on foreign flows, lack of Russian institutions
– Flows largely in the form of ETFs
– The stock market is still dependent on oil prices
Positive signals
– Somewhat softer political approach
– Navalny released from prison. Participated in
Moscow Mayor-elections.
– Support for Russian Syria-solution
– Suggestion for increased dividends from State-
controlled companies. 35% of profit according to
IFRS
– Possible easy on monetary-policy can give some
support to Russian economy
FUND MANAGERS, RUSSIA
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Fredrik Colliander – Responsible manager
Born 1963. Graduate Business Administrator. Worked in Moscow for
one of the major Swedish banks, responsible for market monitoring of
Eastern Europe. 1997-2000 manager of the bank's Eastern Europe
fund. Employed since August 2000. Won the Dagens Industri and
Morningstar Star Manager of the Year 2009 award in the Russia funds
category. Fredrik is one of the foremost Russia managers in the world,
rated by Citywire.
Jan-Olov Olsson
Born in 1959. Master of Science in Business and Economics from the
Stockholm School of Economics. Began working with portfolio
management in 1996 as asset manager of Handelsbanken’s
Östeuropafond. From the end of 1997 to 2000, Jan Olov was asset
manager of the HQ Rysslandsfond and, thereafter, asset manager of
Alfred Berg’s Russian mutual funds until 2008. Employed by Carnegie
Fonder in 2011.
Karin Fries
Born 1974. BA Economics, University of South Carolina, USA. Master
of Economics, Lund University, CeFA/AFA 2008. Employed since 2004.
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CARNEGIE RYSSLANDSFOND, CHARACTERISTICS
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Continuity in asset management, Fredrik Colliander has managed the fund for 13 years
Focused fund with active selection of companies
The fund is one of the best performing Russia funds over time
Lover volatility compared to similar funds
Good liquidity in invested portfolio
5 star rating by Morningstar
Number of positions as of 31 December 2012;
Carnegie 33 JP Morgan 42* Alfred Berg 51 Robur 61 East Capital 74
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* Number of positions as of 31 January 2013
LARGEST HOLDINGS
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Fund’s ten largest holdings
2013-09-30
1. Gazprom ADS 9,2 %
2. Novatek GDR 9,1 %
3. Sberbank 9,0 %
4. Surgutneftegaz Pref 8,1 %
5. Mobile Telesystem ADS 4,6%
6. Transneft Pref 4,5 %
7. Magnit 4,4 %
8. Lukoil 4,3 %
9. Norilsk Mining 3,8 %
10. Mail Group 3,4 %
Fund’s ten largest sectors
2013-09-30
1. Energy 48,1 %
2. Finance & real estate 14,7 %
3. Grocery 9,3 %
4. Commodities 8,0 %
5. Telecom operators 6,0 %
6. Cash and equivalents 5,4 %
7. Information technology 4,3 %
8. Health Care 1,8 %
9. Power supply 1,0 %
10. Capital goods & services 0,8 %
PERFORMANCE
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2013-09-30
Fund RTS Index
1 Year 2,0% -5,6%
5 Years 33,9% 8,1%
10 years 179,7% 108,5%
CARNEGIE CORPORATE BOND
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PORTFOLIO MANAGERS CREDITS AND FIXED INCOME
Employed at Carnegie Fonder since 2011
Awarded ”Portfolio manager of the year – corporate
bonds” by Morningstar & Di
Investor – Tresuary 2009-2011
SEB (Stockholm) – 2007-2009
SEB (New York) – 1997 -2007
MBA + Chartered Financial Analyst, CFA
Carnegie Fonder AB
Stefan Ericson Niklas Edman
Employed at Carnegie Fonder since 2013
Armada Mezzanine Capital 2010-2013
Carnegie Investment Bank (M&A) 2007-2010
MSc in Business Administration, Stockholm
School of Economics
S&P Moody's Kommentar
AAA Aaa Investment grade
AA+ Aa1 Investment grade/High grade
AA Aa2 Investment grade/High grade
AA- Aa3 Investment grade/High grade
A+ A1 Investment grade/upper medium grade
A A2 Investment grade/upper medium grade
A- A3 Investment grade/upper medium grade
BBB+ Baa1 Investment grade/medium grade
BBB Baa2 Investment grade/medium grade
BBB- Baa3 Investment grade/medium grade
BB+ Ba1 High yield/speculative grade
BB Ba2 High yield/speculative grade
BB- Ba3 High yield/speculative grade
B+ B1 High yield
B B2 High yield
B- B3 High yield
CCC+ Caa High yield
CCC Ca High yield
CCC- C High yield
D Inte fullgjort sina betalningar
Kreditbetyg / Rating
BROAD MANDATE CREATES OPPORTUNITIES
Carnegie
Corporate bond
Investment Grade-fonder
High Yield-fonder
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We aim to have a well diversified portfolio
Sweet spot BB- to BBB
We do not invest in the most risky part of the HY spectrum
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INVESTMENT PROCESS
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Meet the company/management/owners
– Management track record, How has the owners
acted previously in this and/or other companies?
Industry analysis
– Outlook, Cyclicality, Industry trends
Where is the bond in the capital structure
– Covenants, how much other debt etc.
Other sources of information
– Company analysis, what do the stack market
think about the company
Potential rating
Liquidity
Secured bond
Unsecured bond
Subordinated
Subordinated
Ordinary equity
Requir
ed
retu
rn
Risk (expected)
Price
INVESTMENTS
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Neste Oil (Finland)
– Refining and marketing company, focusing on premium-quality, lower-emission traffic fuels
– Owned by the finish state 50,1%
– Strong market position in core markets including Finland and the Baltics
– Financial profile expected to strengthen going forward as heaviest investment phase into renewable fuel production completed
Bergvik skog (Sweden)
– One of the largest forest owner in Sweden (c. 8,4%)
– Long term supply contract with Stora Enso and Billerudkorsnäs (both shareholders)
– Market value of the forest holdings substantially above total debt
Teekay LNG (Norway)
– Provider of LNG, LPG and crude oil marine transportation (74 vessels)
– Long-term fixed rate contracts, avg ~12 yrs, the bond is 5 yrs
– High leverage (due to high initial capex) reflected in the price
Global Connect (Denmark)
– Provider of tele and data communication services in Denmark and northern Germany (incl. fiber network)
– Long term contracts with a diversified customer base.
– Growth financing, due to roll-out of fiber network
– Reasonable leverage and strong security package
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PORTFOLIO 2013-10-31
Annual fee: 0,95 %
Front load 0%
Back load 0%
Performance fee None
Sweden Share
BERGVIK SKOG AB 2,7%
ICA GRUPPEN AB 2,6%
TELE2 AB 2,5%
INVESTOR AB 2,3%
BRAVIDA HOLDING AB 2,4%
Finland Share
NESTE OIL OYJ 2,6%CITYCON OYJ 2,0%
STORA ENSO OYJ 1,7%
UPM-KYMMENE CORP 1,6%
METSALIITTO OSUUSKUNTA 1,4%
Norway Share Denmark ShareAKER ASA 2,5% DANSKE BANK A/S 4,5%
DOF SUBSEA ASA 2,2% AP MOLLER-MAERSK A/S 1,2%
DET NORSKE OLJESELSKAP 2,1% VESTAS WIND SYSTEMS A/S 1,0%
TEEKAY LNG PARTNERS 1,8% JYSKE BANK A/S 0,7%
COLOR GROUP ASA 1,6% GLOBAL CONNECT A/S 0,7%
"Other" includes Black Earth Farming, Arion Bank and cash held at SEB
43%
30%
16%
8%4%
Sweden
Norway
Finland
Denmark
Other
Rating overview
Rank Share Comment
1 AAA 16,3%
2 AA+ 0,0%
3 AA 0,0%
4 AA- 2,3%
5 A+ 2,7% Cash held at SEB
6 A 0,0%
7 A- 1,2%
8 BBB+ 4,8%
9 BBB 8,4%10 BBB- 9,8% 45%
11 BB+ 14,7%
12 BB 7,7%
13 BB- 10,1%
14 B+ 7,7%
15 B 8,2%
16 B- 2,4%12 OR 3,7% 55%
Total 100,0%
Average rating 9,6
Other data
Current yield ex fees 4,6%
Duration (yrs) 1,4
Credit duration (yrs) 4,2
AuM (SEK mio) 8 849
Maturity interval Share
<1 yr 4%
1-3 yrs 10%
3-5 yrs 37%
Other 49%
Total 100%
PERFORMANCE (SEK CLASS)
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Year Fund Swe Gov Bond
2013 4,60% -2,48%
2012 11,63% 1,57%
2011 3,24% 13,27%
2010 7,63% 1,97%
2009 7,07% 3,05%
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WHY INVEST IN CARNEGIE CORPORATE BONDS?
Opportunity to receive higher returns than with traditional fixed income products
Diversify the portfolio with a new asset class
Corporate bonds are still priced low relative to government bonds
Difficult to replicate
Invest in the largest credit fund with Nordic exposure
A growing interest from Nordic companies seeking financing through corporate
bonds, presents opportunities for the fund
All bonds in foreign currency are hedged to SEK /EUR /NOK (dependent on
asset class)
5-star overall rating from Morningstar
”Best Cautiously Managed Fund” - MoneyMate Fund Award 2013
Disclaimer
All material in this presentation is provided for general guidance and informational purposes only and relates to the law of Sweden
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not necessarily a guide to future performance.
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