Investment strategy

Our investment philosophy is based on

Quality

• Predictable cash flows and low level of indebtedness
• Professional and experienced management

Geography

• Understanding the investment landscape
• Knowledge of laws and the regulatory framework

Relative value

• Assessment and optimisation of credit risk
• Effective and relevant pricing

Portfolio management

Screening/Sourcing

• Based on extensive experience and knowledge of credit and markets
• Geographical diversification, with a focus on the Nordic region
• Primarily through networks of banks, brokerages and other dealers

Investment process

• Quality companies with a good track record
• A qualitative assessment of leadership (history, performance and reputation)
• Proven business model
• Assessment of capital structure and cash flow analysis
• Relative debt ratio and visibility on underlying cash flow
• Understand underlying loan documentation
• Meeting with management
• ESG and corporate governance
• Investment decision

Implementation

• Concentrated portfolio of 35-45 names
• Diversification through the investments of the companies
• Focus on individual companies rather than sectors
• Maximise relative value across capital structure
• Primarily focused on Nordic issuers

Risk management and reporting

Liquidity

• Ongoing liquidity analyses (spread, depth)
• Monthly reporting to compliance
• Weekly measurement of actual trading volume
• Daily oversight of number of orders and size

Risk monitoring

• Market: Systematic volatility
• Idiosyncratic and company-specific risk
• Industry changes: Political, innovation, competitors
• Interest rate risk

Stress testing

• Testing of different credit default scenarios
• Portfolio testing of extreme market scenarios
• Sensitivity analysis of spreads, swaps and CDS
• Worst case scenario analysis