The investment company Svolder like many other investment companies it was a gem to buy when the worries about tariffs swept over us. The company is now on its toes and making some changes to its portfolio.
Svolder does not have as long a history as some other Swedish investment companies such as Investor, Industrivärden and Latour. The company was founded in the spring of 1993 as a type of project for small-cap investments. A few months later, Svolder was listed on the Stockholm Stock Exchange. Over these 30 years, investors have received a total return of 5,298% . This gives an average annual return of approximately 14% and has thus outperformed the Stockholm Stock Exchange including reinvested dividends, despite not beating the index in the last 3 years.
It all depends on the fact that small companies have struggled, and this is exactly what you get when you invest in Svolder. In addition, the share has long had a premium and now that small companies have had a tougher time, the premium has come down.
When Svolder was at its peak in 2021, we saw a premium that was hovering around 30%. Over the past 5 years, it has been significantly lower, hovering between 5-15%. Today, however, the net asset value is 55 SEK/share (last updated May 2) and today the share price is around 59.55 SEK. A very low premium in other words. As usual, it is much nicer to see a discount than a premium, but it can also be good to look at history and compare it with today’s discount/premium.
A big advantage is that you get Svolder at a very low management fee of 0.5% of managed capital. This is based on Svolder’s small organization of six heads that make up the entire management organization.
There were of course a lot of question marks when Svolder changed CEO about two years ago. Tomas Risbecker replaced the long-standing Ulf Hedlund, who had been CEO since the company was listed. The reason for the change was, in short, that Ulf was retiring.
The strategy seems to continue to be to focus on small-cap companies with a market capitalization of up to 20 billion SEK. The companies must be profitable and listed on the Stockholm Stock Exchange. Svolder currently owns 19 small-cap companies in the portfolio and based on their criteria, there are actually only about 100 eligible companies on the Stockholm Stock Exchange as many do not distribute anything.
CEO of Svolder, Tomas Risbecker
Some changes
Svolder’s recent success story is the defense company Midef, which has risen 280% in 1 year. They have recently halved their holdings here. The reason was, in short, that they wanted to take home a little profit to focus on other things. That rarely has to be wrong.
In addition, they have sold off Nolato which has not had such a nice journey at all. The cash they received was used to invest in Scandic Hotels instead. Some of the cash from Nolato was also used to buy Beijer Alma which continues to perform admirably.
I’ve always liked putting money into the company as it’s a perfect way to get cheap exposure to small companies. Last year we were richly rewarded when Svolder almost doubled the dividend from the previous year.
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