We prefer companies with extensive and strong track records
The best performers this month were ONEX, Oakley Capital, Investor, 3i Infrastructure and Chrysalis. These holdings are good examples of the companies that we choose from the approximately 300 listed private equity companies available globally. We prefer companies with extensive and strong track records. At the same time, we are value investors so market values in relation to the underlying values are important.
Onex, based in Toronto, has since it was founded in 1984 generated an annual return of 27 percent before fees for divested holdings. Assets under management amount to USD 45 billion, up 37 percent in 12 months, of which a significant part is equity. Others among the month’s best-performing holdings also have strong track records and a good mix of underlying portfolio companies. In particular, it is worth mentioning Investor’s large holdings in EQT, and Klarna, which is Chrysalis’ largest holding and has shown very high valuation increases.
There is intense activity in the markets right now, and some of our holdings have been active with IPOs. An example is Swedish Oatley, with shareholders including our holdings Blackstone and Softbank. The private equity market has been in balance since last autumn after investments previously dominated sharply when the pandemic provided opportunities for company acquisitions at lower prices. The private equity companies have once again shifted up the number of divestments. We have great faith in our holdings’ abilities to navigate under different market conditions. At the same time, active development work is ongoing in the underlying portfolio companies with growth investments and profitability improvements.
In other respects, the administration is running according to our expectations. The holdings that we believe in the most and to which we have the highest allocation have performed better than the portfolio as a whole during the month and year, as we have reported in previous periods. The best value developer this year is German Aurelius, which specialises in turn-arounds, followed by the Japanese venture capital investor JAFCO and the large American fund companies Blackstone, KRR and Carlyle.