2018 was in many ways a record year for Kreditfonden. The company behind Scandinavian Credit Fund 1, a fund that, through direct loans to small and medium-sized companies, seeks stable returns for low market risk and low co-variation with the stock exchange, saw its managed capital increase by over 130 percent to SEK 2.8 billion. At the same time, the number of shareholders rose to over 4,600. However, the company does not rest on the male for 2019, with the support of new recruits, a clearer organization and new funds in the assumption, the Kreditfonden will build on its success recipe.
“We see continued great interest in our management, both from private individuals and from institutional investors. The fund has delivered on its return target of 6-8 per cent annual return to a very low market risk. It attracts attention, especially when the stock market has been shaky and alternative asset classes such as hedge funds have not performed, ”says Fredrik Sjöstrand, the fund's responsible manager.
According to Sjöstrand, the ceiling for the fund's managed capital, which was previously set at SEK 3 billion, will be raised to SEK 5 billion. He believes this is reasonable as the fund has expanded its organization while not seeing any major constraint in finding new loans that meet the quality requirements of the fund.
“The credit assessment will never be waived. It is a central part of our philosophy and the explanation for why we have been so successful so far. There is a continued wide range of loans that meet our quality requirements and which offer good returns. As our organization grows and strengthens, we can more easily meet a larger administrative volume and take on a larger loan portfolio, ”he says.
Clearer structure guarantees growth
In 2018, the Kreditfonden has refined its structure, which means that it has become its own AIFM from previously operating under an umbrella organization. According to Sjöstrand, this means that you have greater degrees of freedom and can now embark on a Nordic expansion.
"Our intention is to expand the offer to Norway and Finland next year, which is in line with our ambition to become the leading player in direct lending to companies in Scandinavia and at the same time create unique investment products."
To support continued expansion, the Kreditfonden has grown in terms of staff and has also moved to larger premises to meet a growing organization.
At present, the fund's team consists of loan evaluators, or what in industry languages is called Debt Capital Market (DCM) originators, consists of six people with a broad and diversified background and skills base. At the beginning of 2019, another senior employee will join the group.
“We have recruited Carl Levert, who was previously head of DCM at PWC Sweden and who has extensive experience in corporate finance and analysis. As we grow and in the future will offer more complex products aimed at institutions, it will be central for us to ensure the supply of skills in the company, ”says Sjöstrand.
New funds in the making
In the next year, the credit fund will expand its product offering to include an institutional version of the fund that is now known as Scandinavian Credit Fund 1, which is primarily aimed at private investors.
“Towards the end of this year, we will be applying to launch a second version of the fund to target institutional investors. If everything goes according to plan, the fund will be launched during the first half of 2019 under the company's own AIF license. It will be offered with a lower management fee and have other liquidity requirements to ensure that we can take in larger deposits, ”says Sjöstrand.
In addition to this fund, a fund will be launched focusing on factoring.
“We are constantly looking at ways to develop our product offering and seize the opportunities available in the corporate loan market. Factoring, like direct loans, is a way for us to generate returns by acting as an attractive counterparty when small and medium-sized companies are seeking liquidity solutions, ”says Sjöstrand, who in this situation does not want to reveal too much about the fund's design.
"This is the best we know"
Fredrik Sjöstrand and the co-founder, as well as the CEO, Peter Norman have been central people for the company's strong development since the start of the credit fund. On the question of whether there is a risk that the founders will withdraw, Sjöstrand's answer is clear - no.
“This is the best we know. When we started the fund almost three years ago, our ambition was to create the leading independent player in direct loans to companies in Scandinavia. We have come a long way, but we see so many opportunities ahead. Our ambition is to develop products that are top-notch in this segment and that can provide investors with a safe savings alternative in times when many traditional asset classes are considered highly valued. ”