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Exelity closes September at +1.0%, and is thus +18.2% for the full year 2024 (after fees). Although the large companies continue to perform strongly, the smaller companies had a tougher month where OMX Small Cap PI is noted -9% for the month and -5% for the full year 2024. Thus, Exelity continues to outperform against all indices, despite the fund having an average equity exposure on 60% during the year.
Since the undersigned took over the management of Exelity in the fall of 2023, the fund is +36%, with only one negative return month (-1% in August).
During the month, headwinds were seen in Smart Eye, which was listed down 20%, which was, however, well offset by, among other things, Paxman (+15%), but also a couple of block transactions in BPC Instruments and Freetrailers where Exelity increased its long-term exposure. No company continues to weigh more than 10% of Exelity, where the largest company in the portfolio is 8% as of the end of September.
Over the past 21 months, Exelity has recorded only three negative return months, with the largest decline amounting to -1.6% (September 2023). This can be compared to OMX Small Cap where 14 months have shown negative returns (biggest decline: -9% May-2023) since January 2023. One reason why Exelity pares the declines well is the transaction leg, which generates good returns regardless of the market climate. During the month of September, the transaction leg was +1.2%, and is thus +10.7% for the year. The loan leg has continued to develop stably and constitutes 25% of the fund's core as of the end of September.
It bears mentioning that the loan portfolio is made up of listed companies, all but one of which are listed on the Swedish stock exchange. Exelity has continued to have zero loan defaults since inception, where we continue to reserve for potential losses.
During September, we signed three new guarantees, the largest of which was Vicore Pharma. We continue to selectively underwrite in rights issues, where the average yield through 2024 has been a low 8%. 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.
After a strong development in 2024, I look with confidence towards the end of the year where Exelity's pipeline is judged to remain solid.