20 years of Nordic micro caps

In September 2006, after ten years of investing in Nordic small caps, we launched Fondita Nordic Micro Cap, the first fund dedicated to the smallest companies on the Nordic stock markets. These companies are rarely followed closely by analysts or widely known among investors. That has let us find tomorrow’s champions early and stay invested as they grow.

Since launch, the fund has returned +329 % after fees, or about 7,5 % a year. Over the same period, Nordic large caps (MSCI Nordic Net Return Index) returned 272 % (6,7 % a year), and European large caps (MSCI Europe Net Return Index) returned 220 % (5,9 % a year). The MSCI Nordic Micro Cap index was launched in November 2007 and since that Fondita Nordic Micro Cap has created 146 % positive alpha.

Our strategy has stayed the same since day one. We invest in local champions with the potential to go global. We look for companies with a proven business model and a track record of growing faster and earning more than the market. Many are entrepreneur-led, with a strong owner and significant ownership among management and key staff. In the smallest listed companies, we consider this alignment of interests particularly important.

Other buyers have recognized the same qualities. 22 of the fund’s holdings have been acquired by competitors or private equity firms at an average premium of around 40 %. This is testament to a successful investment philosophy over the past decades.

We look forward to continuing creating value and strong returns for the fund’s investors. We are convinced that the next 20 years look just as bright as the past ones in terms of the opportunities offered by the smallest companies in the Nordic region.

Portfolio Manager
Kenneth Blomqvist