Aurelius, KKR and Compass report strong profit growth
Carnegie Listed Private Equity returned 6.1 percent in March and has risen 15 percent since the start of the year.
The best performers this month were Aurelius (+42.3%), Onex (+14.7%) and Wendel (+12.5%). The year-end reports published this month once again beat market expectations. Aurelius is the holding that has performed best this year, with strong profit growth, followed by KKR and Compass.
From April 1, the fund has been transferred into the Carnegie Fonder group and has changed its name from OPM Listed Private Equity. The management team is unchanged and the portfolio is the same. Looking back, we note that our holdings have delivered long-term high value creation through the private equity active ownership model with a focus on profitability improvements and growth. Most research into returns for private equity show an annual return of 5-6 percent across the stock market as a whole. Carnegie Listed Private Equity has shown a corresponding excess return (5.5%) since its start in 2009 compared with the average for regular global funds. (Morningstar Global Mix Companies)
Interesting trends in private equity, with increased investments in technology/digitalisation, infrastructure and medical can also be seen in the allocation for Carnegie Listed Private Equity. This provides increased diversification and less cyclical sensitivity. There is very great interest in investing in private equity, which we can benefit from as shareholders in PE fund companies. An example from March is KKR, which raised USD 15 billion for a new Asia fund.
After the stock market crash just over a year ago, our holdings were able to take the opportunity to invest to a significant extent as very attractive investment opportunities arose. In step with the general recovery, the private equity market is now in balance with an equally high level of both investments and divestments. The managers have a positive outlook and the majority state that the negative effects of the pandemic have affected their portfolios to a lesser extent than the market as a whole. Hesitant stock markets have led to discounts on company share prices compared with underlying values, which has led to large share buyback programmes, and this was also apparent in March.