Sweden's Carnegie Fonder is launching a strategy focused on spin-offs from core Sweden equity holdings, with both more recent and more historic examples cited.
Carnegie Spin-Off officially starts 21 October, and will be managed by Simon Blecher, Carnegie Fonder's long serving Sweden equity portfolio manager.
He cites recent examples such as SCA spinning off Essity, Atlas Copco spinning off Epirog, and Getinge spinning off Arjo. More historic examples include Husqvarna and Autoliv, both spun-off from Electrolux; with Autoliv in turn recently spinning off Veoneer. Lock specialist Assa was spun out of Securitas before being merged with Finland's Abloy, while financial service provider Avanza has its roots in the old HQ Bank.
"There are plenty of historic examples of spin-offs, both in Sweden and internationally. And there are many business deals yet to be done. my portfolio constitutes several companies that have performed spin-offs or decided to do one, or as we believe should do one," Blecher says.
"The positive is that spin-offs in nine times out of 10 are good for all involved. Both the company that is spinning off, and the company that is spun-off get a clearer focus, better opportunites to grow and higher profitability. And the market likes that."
However, Blecher notes that the fund will not buy everything. Deeper analysis is required.
Assistant manager on the new fund is Mattias Montgomery. The minimum investment has been set at SEK50,000, with a fee level of 1.5%, or 1% plus a performance fee of 20% of return in excess of the SIXPRX index.