Strong performance despite
a challenging market environment
CapMan Public Market
CapMan Public Market makes significant minority investments in listed Nordic small and mid-cap companies with proven business capabilities and high value creation potential.
We made two new investments in 2011 and increased our holding in two existing portfolio companies. In addition, a large number of potential new opportunities were analysed during the year. Our total investment amounted to €32 million. As of the end of 2011, we had made two exits from the Public Market Fund I, with an average 116% annual return (IRR) on invested capital.
The economic climate during 2011 was characterised by a high level of volatility and growing uncertainty. The adverse development in stock market sentiment during the second half of the year affected the share price performance of our portfolio companies. The latter proved relatively resilient to the market downturn, however, thanks to their robust business models and strong market positions. Together with their extensive internal efficiency enhancement programmes, these strengths enabled our portfolio companies to continue developing well during 2011.
Value creation work focusing on strategy
We made good progress in implementing and executing our value creation plans in our portfolio companies during 2011. In the more mature part of the portfolio, we continued to execute the value creation agenda prepared following our investment; while in our more recent investments, the focus has been on gaining access and aligning ourselves with companies’ boards of directors and management teams.
The general focus in value creation work, particularly during the second half of the year, was on preparing our portfolio companies for the challenging market environment ahead and ensuring full execution of on-going improvement programmes. In the current market, we consider strategy to be more important than ever, and during the latter part of the year, we concentrated on refining the companies’ strategic plans for the future. Where needed, we have the capacity to inject additional equity capital to support our portfolio companies in executing their strategic agenda.
We continuously analyse potential new investments with attractive value creation opportunities. There is a large number of interesting small and mid-sized companies operating in the Nordics, and recent developments in the stock market will open up attractive opportunities for a long-term investor such as CapMan Public Market to support their performance.