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May was Exelity's best month since the fund's inception. The fund rose +10.1 % during the month, which means that the year's return after fees is now also +10.1 % for 2026. Since I took over management in the fall of 2023, the fund has delivered a total return of +86 %, corresponding to an average annual return of 26.2 %.
Exelity thus continues to significantly outperform Swedish small- and large-cap indices, comparable funds and all Swedish small- and micro-cap funds.
The table below shows that Exelity has been best in class both over the 4-year horizon and this year. The excess return against the Carnegie Small Cap Return Index and the Carnegie Micro Cap Return Index amounts to approximately 50 % since 2023.
Although the period is still relatively short, we are humbled by the results but at the same time convinced that our strategy; deep fundamental analysis combined with unique, proprietary data points continues to stand out. With a background as an analyst for seven years, I place great focus on identifying undervalued Swedish micro and small cap companies with the potential for strong alpha generation. Exelity essentially owns all of its data internally and continuously monitors a number of specific data points in our portfolio companies. Examples are rental data by region for FreeTrailer, player data for Evolution and wine data for Viva Wine Group. Shares constituted approximately 90% of Exelity as of the end of May.
May in brief
The intensity has been very high during the month. Among other things, we made a put option investment in Circio and had an active dialogue pipeline in the lending area. We also participated in Mutare's placement of Terranor shares at SEK 22 per share and in the directed issue of SHT at SEK 22 per share.
As previously communicated, we had high expectations for Argo Defence, which were met in the Q1 report. The stock rose +12% % during May and has continued to be strong in June. Other strong contributors during the month were:
- SHT (+81%)
- Smart Eye (+52 %)
- BTS Group (+29 %)
- Zinzino (+21 %)
- LUMI (+19 %)
- CTT (+16 %)
On the downside, Physitrack (-13 %) was noted, which continues to trade significantly below its fair value (approximately 1x EV/Sales or 11x EV/EBIT on 2027 estimates). We see potential for a revaluation towards at least 15x EV/EBIT, with further upside if the US venture develops well. Other decliners included FreeTrailer (-11 %), Studsvik (-14 %) and others.
Looking ahead
Market activity remains high with several IPOs and transactions in the pipeline. We are particularly looking forward to the listing of Tången, where Exelity has been an owner for a long time. We assess a justified value of 15x EV/EBIT initially, with the potential to reach 20x when the business model is further proven. The company has strong acquisition space post-IPO and has added several high-margin acquisitions in the past year.
Thank you for your continued trust. It is a privilege to manage your capital and we look forward to continuing to deliver good results together with you in the coming period.
With kind regards,
Marlon Värnik CEO and responsible manager Exelity