Frequently asked questions about closing Scandinavian Credit Fund I

Finserve Nordic AB, which manages the fund Scandinavian Credit Fund I AB (publ), (hereinafter referred to as the Fund), together with the Fund, has decided to completely cancel the loan and request that the early redemption of Vinstandelslån take place and that the Fund's operations be wound down. The background to this decision is that the Fund, since it was reopened for deposits and withdrawals on May 12, 2023, has suffered net outflows of SEK 729 million, which makes it impossible to manage the Fund in a satisfactory manner and in the best interests of the shareholders. In order to ensure equal treatment of all unit owners, the fund has no other option but to wind down the business. It is also possible to take part in press releases that go out on the link:

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What does it mean to liquidate the fund to protect the interest of all investors?

Answer: To ensure that all investors receive the same treatment regardless of whether they are active in requesting redemption or not and that everyone receives the same value in relation to their investment and that no one risks being left behind with possible credit risks, the fund is liquidated by the fund requests early redemption according to the general terms and conditions.

What is your background to the decision?

Response: The fund received larger requested redemptions during November and December 2022, which forced the fund to temporarily close for both subscription and redemption. The liquidity freed up by the underlying receivables has been used to meet requested early redemption which was received and paid out pro rata. After the fund was opened on May 12, the fund has received an additional SEK 729 million in early redemptions. 

Against the background of the above, the administrator has made the assessment that it will be impossible to run the fund further. In order to protect the interests of all investors, the manager is therefore forced to wind down the business.  

How long will the settlement take? (2023-06-01)

Answer: To protect the interests of the unit owners and ensure that everyone gets as much as possible, the fund will follow the normal maturity structure. This means that the settlement will take the necessary time. However, the fund may also sell holdings in the portfolio before the asset's maturity date if it is deemed to be in the common interest of the unit owners.

Update 2023-06-01: It's hard to say but it is estimated that full decommissioning is expected to take 2-3 years but it could also be faster or take longer.

What does pro rata mean?

Answer: In the event of a liquidation, all investors will receive their share of the fund at each payout time. In other words, if you own 1% of the fund, you will receive 1% of the paid amount on each occasion that the fund received liquidity via amortization, interest payment or sale of holdings. Payments will be made gradually over time until all of the fund's portfolio assets are fully liquidated and paid out.

Will I receive returns during the settlement, until it is fully completed?

Answer: The fund's return will go to the unit owners throughout the liquidation period. NAV is calculated as before, value increases or decreases affect the NAV rate and thus the fund unit owner's value. The fund's annual dividend in the form of new profit shares in the event of a possible excess return will, given the fund's liquidation, be withdrawn and instead paid out pro rata to the fund's shareholders.

How will my investment be managed during liquidation?

Answer: The management will continue to be handled in the same way as before, but with a focus on an orderly liquidation of the fund's assets in the portfolio.

How can I see the value of my investment during liquidation?

Answer: The fund will, just like before, continuously calculate the fund's NAV rate every month and publish it on the website.

Does it make a difference if I have sent in a withdrawal form?

Answer: No, since it is the fund that, according to the general conditions, requests early redemption of all profit-sharing loans, all unit owners will be treated equally, meaning that all unit owners will receive pro rata payments as the holdings are liquidated.

Will the fund be listed on NGM during the liquidation?

Answer: The fund intends to inform NGM about the fund's decision to liquidate and then follow the stock exchange's advice.

How often will you pay out money?

Answer: The fund's ability to pay out to unit owners is largely made up of the maturity structure of the remaining loans and also takes into account the transaction costs associated with the payments. It is the fund's assessment that the cost must not constitute too large a proportion of the amount paid, as it risks negatively burdening the unit owners. As a result, the fund makes an ongoing assessment of when a payment opportunity may arise.

Are there any risks linked to the value of my holdings in connection with a liquidation?

Answer: There are risks associated with a scenario where the fund does not have sufficient liquidity to manage the management of the fund's portfolio assets. of capital or liquidation. The fund sees, in addition to the credit risks described in the monthly letter and a challenging market situation, that loans for development properties, properties with investment needs or operating companies that may need financial support or other investments may have problems as a result of the fund not being able to add capital and then possibly receive a substantial negative effect on the fund's NAV. Properties that require investment or have a building credit can have a negative impact on the sales price if the fund does not have the liquidity to finance intended development plans. As a result of the fund not being able to develop the properties according to plan due to liquidity problems, the properties will enter a sales phase as development properties. The consequence of this can lead to a substantially lower sales price and have a negative impact on the fund's NAV. The fund's financed operating companies may be, and to some extent already are, in need of liquidity which the fund will not be able to provide as a result of the liquidity situation and the fund's liquidation. The effect of one or more companies going bankrupt can have significant consequences for the fund's NAV and require larger write-downs. As mentioned in the monthly newsletter, the fund sees that certain counterparties have increased risk.

Furthermore, it should also be noted that the fund's total portfolio during Q1 2020 amounted to nearly SEK 5 billion, whereby the absolute majority of the portfolio's credit loans were decided and paid out under the previous manager. In connection with the pandemic and until today, the fund has experienced strong outflows, where the fund's total portfolio today amounts to approximately SEK 2.7 billion. The fund's large outflows have caused individual holdings' percentage of NAV and exposure to be relatively large, which entails an increased credit risk. In the event of a possible bankruptcy in one of the holdings or another credit event, the size of the exposure risks having a significant effect on the Fund's NAV rate. In the current market situation with challenges in the market for refinancing and the sale of companies, some of the fund's commitments are therefore not only large in terms of individual exposure, but also more difficult to divest.

Who will manage the fund? (2023-06-01)

Hans Westerberg comes in as the new manager and takes on Andrea's work of continuing to manage the fund in the same way as before and managing an orderly liquidation in the common interest of the fund unit owners. Hans has previously worked for 13 years at Swedbank in various senior roles including Head of ECM (Equity Capital Markets), 2 years at Nordea Markets and chief analyst at Danske Bank. The fund assesses that his previous skills are well suited to managing an orderly liquidation of the fund.

When can an investor expect a first payout? (2023-07-18)

The first payment is expected to be made in July. Each individual redemption is associated with a cost to the fund and therefore the goal is to pay out liquid quarterly, provided there is reasonable liquid to pay out.

2023-07-18: A first payout will be made on Wednesday 26 July 2023 and you should also see the refund in your escrow account on the same day. This payment is a total of SEK 250 million and corresponds to approx. 10% of NAV.

How large is the asset pool on 31/5 2023? (2023-06-09)

The capital under management (AuM) amounted to approx. 2.7 billion as of 31 May and the latest NAV. The fund's NAV is published monthly and can be read on the fund's website.

How many shareholders are there? (2023-06-09)

We do not have insight into any exact figure because there are insurance companies and other VP companies that in turn have underlying customers (the customers are trustee registered).

How has NGM acted on the decision? I see that no closes have been made across the exchange since Friday May 26th and I wonder if the trade is open or not? (2023-06-09)

NGM is informed about the liquidation of the Fund. Trading is open until further notice and is governed by the market (buy and sell side). Before the liquidation is completed, the fund will be delisted and will be done in consultation with NGM.

You indicate that the settlement and payment should come continuously during the time it takes to settle all your credits. You state the average duration as 24 months, but when is the last credit repaid according to plan? (2023-06-09)

The last credit is due at the beginning of Q4 2026, but we will work to make it happen earlier given that it does not affect the fund unit holders negatively.

How do you see the payout going, i.e. do you pay out at least 10 % on each occasion or will it be different amounts? (2023-07-05)

The amount paid out may vary from time to time and depends on the liquidity the Fund can release, i.e. it may be more or less than 10 % per payment occasion.

Update 2023-07-05: The payouts depend on when repayments and sales take place. Our ambition is for them to take place quarterly, but that depends on whether the amounts are large enough to be administratively and cost-justifiable.

How often do you think you make payments? (2023-06-09)

The fund intends to make quarterly payments provided there is sufficient liquidity in the portfolio. The payouts are associated with costs that burden the respective unit owners, which means that the Fund will not pay out smaller amounts frequently, but instead wait until the next quarter.

Is it already possible to give a preliminary statement on IF - and roughly how big (as a percentage of holdings) a loss might amount to? (2023-06-09)

No, the Fund is managed as usual and the value of the portfolio (NAV) is published on the first banking day of each month when we set the NAV.

Is there permission from the Financial Supervisory Authority to liquidate the Scandinavian Credit Fund? (2023-06-09)

FI is informed about the liquidation and the fund has an ongoing dialogue with FI where we have answered all their questions.

Is it possible to sell your existing loan stock with all agreements and pledges to another actor/bank or is the pricing so bad that the unit owners lose out compared to you liquidating at your own pace? (2023-06-09)

We continuously evaluate various possibilities and approaches for the liquidation and settlement of all portfolio assets at the highest possible value

In the event that the outcome of the liquidation of Scandinavian Credit Fund means a loss for me - is there any form of guarantee or compensation (for example Investor Protection), alternative deductions in the declaration that can compensate all or parts of a possible loss? (2023-06-09)

Investor protection does not apply to this type of investment and otherwise normal tax rules apply depending on where the money is invested.

Is a management fee charged during the period? (2023-06-09)

Yes, the fund is managed as usual and management fees are charged. However, no performance-based remuneration is charged. The fund has not charged performance-based remuneration since the end of November 2022.

When can an investor expect a first payout? (2023-06-09)

We expect that a first payment can take place in July 2023. We will return with specific information in more detail on the website and we recommend that everyone register for a news subscription at in order to continuously receive the latest information.

How do you see the risk of credit events now? (2023-06-09)

The fund has continuously informed about the market situation and risks in monthly newsletters and webinars during 2023 and also published information on credit risk FAQ on The market situation is and has been challenging, which is also reflected in some of the fund's counterparties.

How do you see the risk that you cause credit events among your customers as they may now have problems refinancing elsewhere? (2023-06-09)

It has been mentioned in the FAQ on the website and it can mean an increased risk or make it more difficult for customers to refinance. The fund will work to mitigate risks to the extent possible and update continuously in monthly newsletters. We would like to point out again that the liquidation was not linked to credit risk but only liquidity.

How do the mortgages look today given the market conditions, are they holding up or have they lost value? Are you thinking about the property market? (2023-06-09)

The pledges in the portfolio are continuously valued and reflected in the portfolio's reserves in accordance with the IFRS9 regulations, taking into account the current market situation, economic conditions and global macro outlook. The fund has adjusted values on an ongoing basis, which increased reserves during 2023.

Is there a possibility that the value could go up next month? Or should investors be prepared for -8 every month for some time to come? (2023-07-05)

The value can increase as well as decrease. However, the risks increase in this state of the economic cycle. The fund works to secure values and avoid losses as much as possible.

Does the write-down have any connection to the fact that new deposits are not coming into the fund? (2023-07-05)

No, as of June 30, the Fund has just over SEK 300 million in cash, and that is why we are returning SEK 250 million to the unit owners. The payout goes to 10% of June's NAV.

Comment the decline about 8.5 %, How come everything comes at once? (2023-07-05)

It is mainly two mortgage-realized shareholdings that have negatively affected the NAV. The mortgage realization has taken place before and means that there is an added equity risk in addition to the credit risk. One is the Norwegian credit agency Scooper, which has written down its forecasts after the Norwegian Riksbank's double increase in the key interest rate. We subsequently revised our profit forecasts for the company, which affected the valuation negatively. The other holding is a Danish electricity trading company which is strongly negatively affected by the changed conditions on the Danish electricity market with a transition from advance payment to arrears. Which means that the capital commitment is moved from the buyer to the supplier.

Is all the increased anxiety really now absorbed to the surface? (2023-07-05)

The valuation reflects today's market conditions. As you know, these current and future values change depending on what happens with interest rates, yield requirements, economic conditions, private consumption space, etc.

What has happened to the mortgage when the write-down is made? The loans have on average had a pledge of 125-150 % of the loan amount? (2023-07-05)

The increased interest rate and the deteriorating economy have eroded the value of the mortgages. We work to get the borrowers to add collateral. Unfortunately, they have not always been possible. In those cases where the borrowers no longer meet our covenants, we have the opportunity to act. In these cases, we have realized the mortgages and are the owners of both properties and companies.

Can the loans be revised upwards or is it only revised downwards? (2023-07-05)

All assets in the fund are continuously valued at assessed market value and are reflected in the NAV each month. There have been recoveries on mortgaged assets in the past and may happen in the future.

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