carnegie-ilta 5.11.2013

CARNEGIE FONDER PRESENTATION Nordnet - November 2013

Carnegie Fonder AB

WHO WE ARE

Carnegie Fonder AB

Mikael Engvall

Institutional sales with Emerging Market Focus. Mikael has covered the

Russian Market since 1996, initially with HQ Bank and since 2010 with

Carnegie Investment Bank.

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Niklas Edman

Portfolio Manager Fixed Income. Niklas has worked in the financial

industry since 2007, with corporate finance at Carnegie Investment

Bank and as investment manager at Armada Mezzanine Capital.

CARNEGIE FONDER IN SUMMARY

Founded 1988

EUR 4.5 billion in AuM

Focus on Nordic Fixed Income and Nordic Equities and Emerging Markets

Institutional clients, insurance companies and distributors, private clients

Over 300,000 end clients

Carnegie Fonder AB 3

INVESTMENT PHILOSOPHY

Active management without restrictions

with regard to company or sector with

the aim of generating a positive and

stable return

Concentrated portfolios – about 30

holdings of shares with good liquidity

Value management of assets considered

to be undervalued based fundamental

analysis

Through our investment philosophy, our

aim is to generate returns with lower

overall risk than our competitors


FUNDS ON EMERGING MARKETS

Carnegie Emerging Markets 1996

Carnegie Rysslandsfond 1997

Carnegie Kinafond 2004

Carnegie Indienfond 2004

Carnegie Afrikafond 2006

__________________________________

About EUR 1.0 billion in emerging markets funds


CARNEGIE RYSSLANDSFOND November 2013

Carnegie Fonder AB

RUSSIAN MARKET

The world sixth largest economy

The world largest oil- and gasproducer

The world fourth largest currency reserves

Russian equity market – attractive valuations

– PE ratio around 5

– 50% discount to other emerging markets


Discount for a reason

– Increased tension between Putin and Medvedev

– Increased tension between Russia and USA

– Weaker Corporate Governance (TNK BP/ Rosneft)

– Global concerns towards Russia

– Dependent on foreign flows, lack of Russian institutions

– Flows largely in the form of ETFs

– The stock market is still dependent on oil prices

Positive signals

– Somewhat softer political approach

– Navalny released from prison. Participated in

Moscow Mayor-elections.

– Support for Russian Syria-solution

– Suggestion for increased dividends from State-

controlled companies. 35% of profit according to

IFRS

– Possible easy on monetary-policy can give some

support to Russian economy

FUND MANAGERS, RUSSIA

Carnegie Fonder AB

Fredrik Colliander – Responsible manager

Born 1963. Graduate Business Administrator. Worked in Moscow for

one of the major Swedish banks, responsible for market monitoring of

Eastern Europe. 1997-2000 manager of the bank's Eastern Europe

fund. Employed since August 2000. Won the Dagens Industri and

Morningstar Star Manager of the Year 2009 award in the Russia funds

category. Fredrik is one of the foremost Russia managers in the world,

rated by Citywire.

Jan-Olov Olsson

Born in 1959. Master of Science in Business and Economics from the

Stockholm School of Economics. Began working with portfolio

management in 1996 as asset manager of Handelsbanken’s

Östeuropafond. From the end of 1997 to 2000, Jan Olov was asset

manager of the HQ Rysslandsfond and, thereafter, asset manager of

Alfred Berg’s Russian mutual funds until 2008. Employed by Carnegie

Fonder in 2011.

Karin Fries

Born 1974. BA Economics, University of South Carolina, USA. Master

of Economics, Lund University, CeFA/AFA 2008. Employed since 2004.

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CARNEGIE RYSSLANDSFOND, CHARACTERISTICS

Carnegie Fonder AB

Continuity in asset management, Fredrik Colliander has managed the fund for 13 years

Focused fund with active selection of companies

The fund is one of the best performing Russia funds over time

Lover volatility compared to similar funds

Good liquidity in invested portfolio

5 star rating by Morningstar

Number of positions as of 31 December 2012;

Carnegie 33 JP Morgan 42* Alfred Berg 51 Robur 61 East Capital 74

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* Number of positions as of 31 January 2013

LARGEST HOLDINGS


Fund’s ten largest holdings

2013-09-30

1. Gazprom ADS 9,2 %

2. Novatek GDR 9,1 %

3. Sberbank 9,0 %

4. Surgutneftegaz Pref 8,1 %

5. Mobile Telesystem ADS 4,6%

6. Transneft Pref 4,5 %

7. Magnit 4,4 %

8. Lukoil 4,3 %

9. Norilsk Mining 3,8 %

10. Mail Group 3,4 %

Fund’s ten largest sectors

2013-09-30

1. Energy 48,1 %

2. Finance & real estate 14,7 %

3. Grocery 9,3 %

4. Commodities 8,0 %

5. Telecom operators 6,0 %

6. Cash and equivalents 5,4 %

7. Information technology 4,3 %

8. Health Care 1,8 %

9. Power supply 1,0 %

10. Capital goods & services 0,8 %

PERFORMANCE


2013-09-30

Fund RTS Index

1 Year 2,0% -5,6%

5 Years 33,9% 8,1%

10 years 179,7% 108,5%

CARNEGIE CORPORATE BOND

Carnegie Fonder AB

PORTFOLIO MANAGERS CREDITS AND FIXED INCOME

Employed at Carnegie Fonder since 2011

Awarded ”Portfolio manager of the year – corporate

bonds” by Morningstar & Di

Investor – Tresuary 2009-2011

SEB (Stockholm) – 2007-2009

SEB (New York) – 1997 -2007

MBA + Chartered Financial Analyst, CFA

Carnegie Fonder AB

Stefan Ericson Niklas Edman

Employed at Carnegie Fonder since 2013

Armada Mezzanine Capital 2010-2013

Carnegie Investment Bank (M&A) 2007-2010

MSc in Business Administration, Stockholm

School of Economics

S&P Moody's Kommentar

AAA Aaa Investment grade

AA+ Aa1 Investment grade/High grade

AA Aa2 Investment grade/High grade

AA- Aa3 Investment grade/High grade

A+ A1 Investment grade/upper medium grade

A A2 Investment grade/upper medium grade

A- A3 Investment grade/upper medium grade

BBB+ Baa1 Investment grade/medium grade

BBB Baa2 Investment grade/medium grade

BBB- Baa3 Investment grade/medium grade

BB+ Ba1 High yield/speculative grade

BB Ba2 High yield/speculative grade

BB- Ba3 High yield/speculative grade

B+ B1 High yield

B B2 High yield

B- B3 High yield

CCC+ Caa High yield

CCC Ca High yield

CCC- C High yield

D Inte fullgjort sina betalningar

Kreditbetyg / Rating

BROAD MANDATE CREATES OPPORTUNITIES

Carnegie

Corporate bond

Investment Grade-fonder

High Yield-fonder

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We aim to have a well diversified portfolio

Sweet spot BB- to BBB

We do not invest in the most risky part of the HY spectrum

06/11/2013

INVESTMENT PROCESS


Meet the company/management/owners

– Management track record, How has the owners

acted previously in this and/or other companies?

Industry analysis

– Outlook, Cyclicality, Industry trends

Where is the bond in the capital structure

– Covenants, how much other debt etc.

Other sources of information

– Company analysis, what do the stack market

think about the company

Potential rating

Liquidity

Secured bond

Unsecured bond

Subordinated

Subordinated

Ordinary equity

Requir

ed

retu

rn

Risk (expected)

Price

INVESTMENTS

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Neste Oil (Finland)

– Refining and marketing company, focusing on premium-quality, lower-emission traffic fuels

– Owned by the finish state 50,1%

– Strong market position in core markets including Finland and the Baltics

– Financial profile expected to strengthen going forward as heaviest investment phase into renewable fuel production completed

Bergvik skog (Sweden)

– One of the largest forest owner in Sweden (c. 8,4%)

– Long term supply contract with Stora Enso and Billerudkorsnäs (both shareholders)

– Market value of the forest holdings substantially above total debt

Teekay LNG (Norway)

– Provider of LNG, LPG and crude oil marine transportation (74 vessels)

– Long-term fixed rate contracts, avg ~12 yrs, the bond is 5 yrs

– High leverage (due to high initial capex) reflected in the price

Global Connect (Denmark)

– Provider of tele and data communication services in Denmark and northern Germany (incl. fiber network)

– Long term contracts with a diversified customer base.

– Growth financing, due to roll-out of fiber network

– Reasonable leverage and strong security package

Carnegie Fonder AB

PORTFOLIO 2013-10-31

Annual fee: 0,95 %

Front load 0%

Back load 0%

Performance fee None

Sweden Share

BERGVIK SKOG AB 2,7%

ICA GRUPPEN AB 2,6%

TELE2 AB 2,5%

INVESTOR AB 2,3%

BRAVIDA HOLDING AB 2,4%

Finland Share

NESTE OIL OYJ 2,6%CITYCON OYJ 2,0%

STORA ENSO OYJ 1,7%

UPM-KYMMENE CORP 1,6%

METSALIITTO OSUUSKUNTA 1,4%

Norway Share Denmark ShareAKER ASA 2,5% DANSKE BANK A/S 4,5%

DOF SUBSEA ASA 2,2% AP MOLLER-MAERSK A/S 1,2%

DET NORSKE OLJESELSKAP 2,1% VESTAS WIND SYSTEMS A/S 1,0%

TEEKAY LNG PARTNERS 1,8% JYSKE BANK A/S 0,7%

COLOR GROUP ASA 1,6% GLOBAL CONNECT A/S 0,7%

"Other" includes Black Earth Farming, Arion Bank and cash held at SEB

43%

30%

16%

8%4%

Sweden

Norway

Finland

Denmark

Other

Rating overview

Rank Share Comment

1 AAA 16,3%

2 AA+ 0,0%

3 AA 0,0%

4 AA- 2,3%

5 A+ 2,7% Cash held at SEB

6 A 0,0%

7 A- 1,2%

8 BBB+ 4,8%

9 BBB 8,4%10 BBB- 9,8% 45%

11 BB+ 14,7%

12 BB 7,7%

13 BB- 10,1%

14 B+ 7,7%

15 B 8,2%

16 B- 2,4%12 OR 3,7% 55%

Total 100,0%

Average rating 9,6

Other data

Current yield ex fees 4,6%

Duration (yrs) 1,4

Credit duration (yrs) 4,2

AuM (SEK mio) 8 849

Maturity interval Share

<1 yr 4%

1-3 yrs 10%

3-5 yrs 37%

Other 49%

Total 100%

PERFORMANCE (SEK CLASS)


Year Fund Swe Gov Bond

2013 4,60% -2,48%

2012 11,63% 1,57%

2011 3,24% 13,27%

2010 7,63% 1,97%

2009 7,07% 3,05%


WHY INVEST IN CARNEGIE CORPORATE BONDS?

Opportunity to receive higher returns than with traditional fixed income products

Diversify the portfolio with a new asset class

Corporate bonds are still priced low relative to government bonds

Difficult to replicate

Invest in the largest credit fund with Nordic exposure

A growing interest from Nordic companies seeking financing through corporate

bonds, presents opportunities for the fund

All bonds in foreign currency are hedged to SEK /EUR /NOK (dependent on

asset class)

5-star overall rating from Morningstar

”Best Cautiously Managed Fund” - MoneyMate Fund Award 2013

Disclaimer

All material in this presentation is provided for general guidance and informational purposes only and relates to the law of Sweden

and/or European law as applicable. The material is under no circumstances to be used or considered as financial advice or an offer to

sell, or a solicitation of any offer to buy any securities. The material is obtained from various sources; while all reasonable care has

been taken to ensure that the material is true and not misleading, Carnegie does not guarantee its accuracy or completeness.

The presentation and its content and material does not have regard to any specific investment objectives, financial situation or the

particular needs of any specific person who may access this presentation. Investors should seek financial advice regarding the

appropriateness of investing in any securities or investment strategies discussed or recommended in this presentation and should

understand that statements regarding future prospects may not be realized. Investors should also understand that past performance is

not necessarily a guide to future performance.

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whatsoever (to the extent permitted by applicable law) for any direct or consequential losses, costs, claims, damages, expenses or

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