Nordic Factoring Fund

Nordic Factoring Fund offers a unique fund product for private investors with exposure to the Nordic market for factoring loans. The fund aims to generate an annual return of 6+ percent at a low market risk. At the same time, the co-variation with other asset classes is expected to be low to non-existent. The fund thus serves as an important building block in a well-diversified portfolio.

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What is Factoring?

  • Factoring is a service traditionally offered by banks and financial companies, but opened up to new players in light of new regulations
  • The service means that companies sell or mortgage their invoices with factoring companies as counterparties
  • The factoring industry is a fast-growing and profitable industry that offers many companies new ways to finance their working capital
  • Factoring companies offer alternatives to traditional bank loans, with the important difference that factoring does not affect the company's balance sheet
  • Traditional bank financing requires collateral in the form of property mortgages or guarantees. In factoring, the acquired invoices constitute security
  • Bank financing is usually connected with so-called covenants, which can be translated as a requirement formulated as a financial key figure or other financial or non-financial measure that is set as a condition by a bank when issuing a credit. Factoring does not require covenants

Quick facts

This is how the fund generates returns in 5 steps

  1. The investor buys the fund
  2. The fund has agreements with a number of operators or factoring companies that are financed via the invested capital
  3. The factoring companies buy invoices from companies approved by the fund via factoring
  4. The invoices are pledged in the name of the fund and serve as collateral
  5. The factoring companies ensure that the invoices are paid by the companies to which the invoices are issued and the fund receives interest on the invested capital, which translates into a return for the investor

Risks

All investments are associated with risks and historical returns are no guarantee of future returns. The funds invested in the Nordic Factoring Fund can increase as well as decrease in value, and it is not certain that the person who invests in the Nordic Factoring Fund will recover the invested capital. Below we list the risks associated with an investment in the fund. Before an investment, so should the information brochure and general conditions be read in its entirety.

Liquidityrisky

Liquidity risk for a company is the risk that the company cannot fulfill its payment obligations at the due date, i.e. that the Fund lacks liquidity to pay, for example, invoices or redemption amounts to Investors on time. The risk arises because the Fund finances itself by issuing Profit Share Loans, which entail payment obligations towards the Investors.

The risk may increase if the Fund finds it difficult to raise capital. Liquidity risk can also arise in the Fund's Portfolio, if the assets the Fund has invested in would be difficult to dispose of or if the Fund finds it difficult to liquidate the Portfolio or if it takes longer than expected to liquidate positions and sell investments.

Liquidity risk means for a bond that it is not possible to sell the bond early. Under normal market conditions, the Market Guarantor offers a purchase price for those who want to sell early. Although bonds in the form of Dividend Loans have become more established recently, the secondary market is still limited. There is therefore a risk that the liquidity of the Profit Share Loans is low, and that they are traded at a price below the issue price.

Sometimes it can be difficult or impossible to sell Profit Share Loans during the term and it is then illiquid. This can, for example, occur in the event of strong market movements, changes in liquidity, changes in regulations, hedging ("hedging") of positions, market disruptions, communication interruptions or other events which may lead to difficulties in trading at reasonable rates or due to the market place concerned being closed, or that trade is subject to restrictions for a certain period.

Interesterisk

The value of the profit share loan is largely dependent on a number of different factors. One such factor is the market's general interest level, which is why investors in the fund's profit-sharing loans should understand that the development of the yield can be negatively affected by changes in interest levels in the markets where the fund and the borrowers operate.

Reinvestmentrisky

Long-term return opportunities on the profit-sharing loans issued by the fund are highly dependent on the fund finding new lending objects that require financing and which are also suitable based on the requirements set by the fund.

Macroeconomic risk

A sharp downturn in the country's or region's economy can affect the companies' ability to pay interest and can also lead to repayment of the loan not being completed on time or not being paid at all. For the fund, this means the risk that the invested capital will not remain intact or that the return on the invested capital will not be as high as expected or will not occur at all. However, the AIF fund has commissioned an analysis of other funds in other countries that have similar strategies, which showed that the funds were not affected at all during, for example, the latest financial crisis.

Marketingrisky

The fund's product is relatively new and unknown to smaller investors, which is why it may be difficult to reach out and attract a sufficient number of investors.

The value development of the investments

The fund offers short-term direct lending to small and medium-sized companies in order to achieve the goal of a high risk-adjusted return with low or no correlation with other asset classes. The return on its investments that the fund wants to achieve is thus directly dependent on the repayment ability of the loan objects. There is thus no guarantee that the fund's investments will yield the expected return, or that the value of the invested capital will be kept intact, which is why there is also no guarantee that invested capital can be recovered upon redemption. It should be emphasized that the fund will largely invest in small and medium-sized companies that have good liquidity and financial standing and that need extra capital for various projects. This means that the fund differs from the objects that private individuals usually have the opportunity to invest in, and also means that you as an investor get a risk diversification that is otherwise difficult to achieve as an individual investor.

Trade with the Nordic Factoring Fund

Investment in the company's profit-sharing loan must primarily be seen as an investment for the entire term of the bond. The profit-sharing loans are freely transferable with the restrictions imposed by applicable law. The profit share loans will be listed on NGM-NDX where they are priced continuously.

The duration and volatility of the investment opportunity

Investment in the fund's strategy is associated with risk, also in terms of its duration. However, the fund assesses that the investment opportunity will remain as long as the banks' capital requirements are at least at the same high level as today. In addition, the fund's investment strategy is relatively insensitive to economic conditions, provided that market conditions do not deteriorate significantly.

Currencyrisk

The fund may make investments of a certain part of the capital in currencies other than the Swedish krona. The fund intends to currency hedge the investments made in currencies other than the Swedish krona, which is why the risk is considered to be small.

Creditrisk

The fund's investment strategy involves some credit risk as there is always a risk that the loaned capital will not be repaid to the fund at the end of the loan's term, which can affect the return. In the event of a sharp deterioration in the fund's position, the fund may be unable to fulfill its obligations according to the investment agreements entered into with the bondholders.

Who can invest

Private individuals

Anyone who has a deposit or VP account via a bank or fund commission agent can invest in Vinstandelslån, as these are listed on NGM (Nordic Growth Market).
Profit share loans can also be an asset type in a deposit insurance (capital insurance or pension insurance) or investment savings account (ISK). When investing via deposit insurance or ISK, contact should be made beforehand with your insurance company or your bank/fund commissioner if possible.

Business

Anyone who has a deposit or VP account via a bank or fund commission agent can invest in Vinstandelslån, as these are listed on NGM (Nordic Growth Market).
Profit share loans can also be an asset type in a deposit insurance (occupational pension or endowment insurance). When investing via deposit insurance, contact should be made with your insurance company before investing to ensure that it is possible.

Discretionary asset management

Anyone who manages discretionary asset management can invest in Vinstandelslån, as these are listed on NGM (Nordic Growth Market).

Professional investors

Professional investors can invest in Profit Share Loans if current legislation and management mandates allow it. Contact Nordic Factoring Fund for more information.

Fund development

Downloadable monthly report

Documents

Before an investment in Nordic Factoring Fund AB, it is important that you read the written material about the fund in order to be able to make a well-founded decision, which means that you understand the risks that exist with the fund and that you understand how the fund works. Therefore, you should carefully read the information brochure, the basic fact sheet and the prospectus and its supplements. You will find all relevant documents here.

Subscription and redemption

Subscription

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  • SETTELMENT DAY

REDEMPTION

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  • SETTLEMENT DAY
  • PAYOUT DAY

Subscription

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  • SETTELMENT DAY

REDEMPTION

  • LAST DAY FOR REDEMPTION FORM
  • SETTLEMENT DAY
  • PAYOUT DAY
  • Current period

    Subscription

    • LAST DAY FOR SUBSCRIPTION FORM
    • LAST DAY FOR PAYMENT
    • SETTELMENT DAY

    REDEMPTION

    • LAST DAY FOR REDEMPTION FORM
    • SETTLEMENT DAY
    • PAYOUT DAY
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    Subscription

    • LAST DAY FOR SUBSCRIPTION FORM
    • LAST DAY FOR PAYMENT
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    REDEMPTION

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    • PAYOUT DAY

Financial calendar

Press releases

Nordic Factoring Fund AB (publ) – Publish Half-year report 2023

2023-08-31 17:15 CEST

Stockholm 31 August 2023 – Nordic Factoring Fund AB (publ), (hereinafter referred to as the Fund), in which the public and institutional investors have been offered to subscribe to Vinstandelslån. The dividend loan is listed on the Nordic AIF Sweden segment under Main Regulated at the Nordic Growth Market NGM AB (NGM) in Stockholm.

Drawing

Sales and redemption of profit sharing loans take place on the first banking day of each month.

Registration must be done on a special form. (Subscription can take place 4 bank days before each change of month, February to December, not January). You can find the form under Documents on this page.

Subscription can also be done with BankID via Mangold Fondkommission AB

The minimum amount for subscription is SEK 100,000.

Management concept

Investment process
The investment objects are approved by an investment committee after a well-developed credit process. The fund strives to consistently enter into engagements with borrowers whose expected return is attractive in relation to the credit risk involved in the engagement. The individual commitments are balanced against each other in order to achieve an effectively balanced credit risk for the fund as a whole. The investment objects have a low correlation with other markets and the risk in the fund must primarily be driven by credit risk and return for the fund as a whole.

Direct lending to companies
The fund's lending objects are primarily found throughout Scandinavia and are aimed at companies that are in some form of expansion, investment, refinancing, restructuring, generational financing, seasonal or other needs.

Fund units
The fund can, on a selective basis, place funds in fund shares in similar funds without geographical restriction.

Derivative
The fund has the option of using derivative instruments, partly to reduce risks that are undesirable, partly to obtain exposures that are deemed attractive for the fund and its risk profile.

Interest-bearing instruments
The fund can invest liquidity in bonds.

Deposit to bank
The fund can place liquidity with credit institutions after a credit check.

Traded markets

The fund's main activity is to provide loan capital to small and medium-sized companies with funds that influence through the offer through this prospectus. The fund's lending objects are found primarily in Scandinavia. The fund can also invest on a selective basis in fund shares in similar funds or through co-financing together with national or international partners without geographical limitation. Through this, the fund intends to create an investment that has lower risk than shares and better potential for returns than traditional fixed income investments.

Management fee

Management fee is paid partly in the form of a fixed remuneration, partly in the form of a profit-sharing remuneration.

The fixed compensation amounts to 1.6 percent per year. The fixed compensation is paid quarterly.

Profit sharing amounts to 20 percent of the fund's increase in value in addition to the average return on 3-month treasury bills after the "high watermark". High watermark means that the fund only pays a performance-based fee after any underperformance from previous periods has been compensated. The performance-based compensation is paid annually.

Brokerage, clearing fees and other transaction costs attributable to the fund's investments are paid on an ongoing basis by the fund.

Redemption

The fund will be open for Early Redemption on January 1, April 1, July 1 and October 1. In order for the fund to be able to plan its liquidity, we need to receive requests for early Redemption 90 days before the next quarter. In practice, this means that redemption needs to be available to us no later than December 31, March 31, June 30 and September 30 in order to receive redemption for the next calendar quarter.

The fund's liquidity under normal conditions amounts to 3-6% of the portfolio. If the Fund lacks sufficient liquid funds, funds for redemption must be acquired by divesting parts of the Portfolio. If such divestment due to prevailing market conditions or according to the Fund's assessment would significantly disadvantage other Investors, the Fund may delay such divestment until such divestment can take place in good order.

If funds for redemption need to be acquired through the sale of property included in the Fund, the sale must take place and the redemption executed as soon as possible. The fund may postpone the sale and redemption of the shares, if there are special reasons for the measure and it is justified by taking into account the interests of the Investors.

Redemption takes place at the NAV rate determined at the end of the calendar year quarter closest to the redemption date.

You can find the redemption form under Documents on this page.

Board Nordic Factoring Fund

Peter Norman Ulltin

CHAIRMAN OF THE BOARD

Andreas Konstantinou

MEMBER AND CEO

Mats Johansson

MEMBER AND CEO

 

Karin Nielsen

COMMISSIONER

Helena Nieckels

COMMISSIONER

See All

You can find complete information about Finserve's funds in the funds' Fact Sheets and Information Brochures. On the same page, you will also find other documents including full and half-year reports. The material on these pages is intended as general product information only. It should not be seen as investment advice or investment recommendations, and should not be used as a basis for investment decisions. You should always read the fund's Fact Sheet and Information Brochure/Prospectus before you start saving in a fund. We cannot guarantee that the information is complete and it is subject to change without prior notice. The published share value (NAV rate) is based on the most current data available.