Exelity Monthly Report – July 2024

Exelity once again outperforms all indexes and closes July at +3.52%, this despite low activity in transactions where above all the equity leg has delivered well. Thus, the fund is +18.3% for 2024 after fees, which can be compared with the OMX Small Cap and First North Index which are +8.2% and +3.4% respectively for the full year.
Since I took over the manager role in the fall of 2023, Exelity is +36.4% (after fees), where the fund has continued to have no negative return month, where the distribution of monthly returns is stable.
Similar to the historical summer pattern, transactional activity declined during July with no new guarantees being signed. However, Exelity signed two new loans during the month, where Exelity now has almost 30% of the fund allocated to loans. As historically, the loan portfolio continues to act as a stable cushion on the downside, where reserves for potential losses are taken. However, it bears repeating that no defaults have occurred within the loan portfolio since the start.
Within the equity leg, Exelity continues to have a stable and diversified portfolio where no holding represents more than 10% of the fund's NAV. During the month, strong developments were noted for two of the fund's core holdings, with Paxman up 23.4% and BPC +9%.
The decline in Evolution was pared well where large parts of Exelity's holdings were sold shortly before the Q2 report where we had a concern for profitability during the quarter. About 80% of the holding in Evolution has now been bought back, where Evolution has only had a marginally negative impact on the month's results.
We note that Exelity's quantitative modeling for loans and guarantees continues to create strong value for the fund's shareholders, and is a main reason for the fund's strong development in transactions.

Wishing you a continued pleasant summer!