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The challenging stock market climate for smaller companies continues and also affects us at Exelity. Despite this, the fund ends February with a positive return of +1.7 %, which means that so far in 2026 we are up +2.1 %. In comparison, the Carnegie Micro Cap Index fell by -2 % during the month (2026: -5.5 %). Exelity thus continues to deliver an excess return against the small-cap index.
Over the past few years, the fund has developed strongly:
- 2025: +17 %
- 2024: +26 %
- 2023: +27 %
Exelity has a deliberately concentrated portfolio where we actively seek alpha among Nordic small-cap companies. Our largest holding is approximately 6 % of the fund. The strategy has proven to work well, and since I took over management in the fall of 2023, we have only had four negative return months. During the same period, the fund has risen +72 % after fees. During the same period, the Swedish small- and large-cap index has had 10–17 negative months and significantly lower total returns.
Development and activity of the month
The transaction leg remained calm during February, while the equity portfolio showed good activity and strength. The market was characterized by continued concerns about AI and an escalating situation in the Middle East. Since January, we have proactively reduced the fund's direct exposure to a potential war in Iran, and as of the end of February have a cash position of approximately 15% of Exelity.
Among the highlights of the portfolio, we note:
- Lucara Diamond +12 % (after recent private placement)
- Surgical Science +20 %
- Zinzino +13 %
- North Rest +22 %
We also participated in a private placement in iZafe during the month. In addition, we remain pleased with our involvement in Argo Defence, where we were an anchor investor at the IPO in December and have increased our holding since then.
Argo Defence – a misunderstood but powerful report
In February, Argo Defence presented its Q4 report, which resulted in a price reaction of -13 %. However, we see the numbers completely differently and believe that the report was strong, but misunderstood by the market. Here are some key points that we think many have missed:
- Net sales ended at SEK 31.6 million, compared to the guidance range of SEK 11.7–26.7 million (excl. donations SEK 8.3 million for the full year), approximately 65% above midpoint guidance. The market seems to have missed that the guidance included donation revenue for the full year.
- A delivery of approximately SEK 10 million came in earlier than planned (Q4 instead of Q1 2026), which temporarily reduced the order backlog from SEK 80 million to SEK 70 million. This created concern, but is fundamentally positive.
- Direct costs ended up at SEK 27.8 million, of which we estimate that approximately SEK 5 million was attributable to the donation program. The underlying gross margin excluding donations is then 28 % – a clear improvement that the market has not fully captured.
We maintain a positive view of Argo Defence and see significant potential going forward.
Looking ahead
We look forward to the Bergholm IPO, where we participate as an anchor investor. The subscription period runs from March 2–13, 2026, an investment we have high expectations for.
We continue to work in a disciplined manner with our combined strategy: growth investments in Nordic small companies together with selected financial transactions. The goal is stable, risk-adjusted returns over time – regardless of the market climate.
Thank you for your trust.