An investment grade fund with a focus on Nordic bonds
The fund is managed by Øivind Thorstensen and Simen André Aarsland Øgreid (pictured), with a focus on credit risk within its mandate. We focus on companies with profitable business models, stable outlooks, and favorable conditions for the future.
Value Investing
The fund’s exposure to the bond market will primarily be achieved through direct investments in corporate bonds, government bonds, convertible bonds, and other debt securities. Regardless of credit ratings, the manager will always conduct their own assessment of each individual investment. Investment decisions will mainly be based on thorough cash flow- and balance sheet analysis. The fund does not have restrictions on the maturity of individual bonds or the portfolio as a whole. However, under normal market conditions, the fund intends to maintain an average maturity profile of around three years. The interest rate duration will typically be less than two years. Floating-rate loans will minimize interest rate risk for the fund.
Strategy – How to Generate Excess Returns?
Active portfolio management is the cornerstone in the pursuit of excess returns for the fund’s investors. As part of the portfolio management, a deep understanding of the loan documents and the structural aspects that can affect returns is crucial. This involves active portfolio repricing, either by arbitraging the yield curve of the issuer, where different loan maturities may be mispriced, or mispricing relative to comparable companies. Equally important is continuously repricing and changing the portfolio composition, whether the company’s performance over time is good or bad, and when market conditions change. Ultimately, effective portfolio management is based on the ability to take profits and losses when appropriate.
Our mandate
The fund invests primarily in the Nordic market, where we can invest across all sectors. The aim is to construct a portfolio that represents a cross-section of the Nordic economy. The investment philosophy is based on fundamental company analysis together with associated assessments of equity access, sector analysis, potential upside and downside, corporate governance and ownership structure. On average, the portfolio will have around 35-40 different investments. Dividends received from underlying assets are reinvested in the fund. The fund may hold up to 10 per cent in cash and up to 10 per cent in equities. The fund complies with the rules in the Securities Funds Act for UCITS funds.
