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Strong month in February where the fund closes at +2.5% after fees, and is thus +6.4% for the full year 2025. This means that Exelity is +54% since I took over management in the fall of 2023, with only one negative return month (August 2024: -1.0%). Exelity has thus outperformed all indices during the same period. At the same time, volatility remains low, around 4% with a Sharpe ratio around 3.9.
Exelity aims to return at least 10% annually, which we are therefore well on our way to achieving already in the first half of 2025. A goal that we have also reached by a good margin in the last two years (2023: +27%, 2024: +26%).
During February, several core holdings stood out, for example Smart Eye rose 26% during the month on a strong report. As we wrote about in our last monthly newsletter, we saw good risk/reward ahead of the report. Other holdings such as Zinzino (+16%), FreeTrailer (+18%) and Astor (+101%) also lifted the fund during the month. Astor is a holding we chose to sell at the end of the month after the valuation had become too strained. Exelity's largest holding constitutes 8% of the fund, which means that the fund is well diversified.
While the equity leg delivered strongly, we saw continued stability in the transaction leg. During the month, the loan to Nanexa was disbursed, corresponding to approximately 3% of NAV. We also saw several positive outcomes in several guarantees during February, such as Alligator and Intervacc. Exelity's strategy of being very selective in guarantees, and only being a guarantor in cases we view positively in the long term, continues to generate good returns. Our models for guarantees continue to develop positively, and as more data is collected, we become increasingly confident that various factors are weighted correctly for optimal output. Exelity's quantitative modeling is a strong security for the transaction leg, and something that stands out among other guarantors.
After the end of the month, we signed an agreement to guarantee Lokotech's rights issue. This means that Exelity has a little over 1% in income from already signed guarantees and loans until the summer. This, as we have previously mentioned, creates a cushion on the downside for the fund's development in the near term and is a factor in Exelity's tendency to parry negative stock market months reasonably well.
With kind regards,
Marlon Varnik