Nordic Factoring Fund

Nordic Factoring Fund

Nordic Factoring Fund offers a unique fund product for private investors. Through an investment in the fund, the unit owner is exposed to the Nordic market for factoring loans. The fund's goal is to generate an annual return of 7 to 9 percent at a low market risk. At the same time, the correlation with other asset classes is expected to be low to nonexistent. Thus, the fund serves as an important building block in a well-diversified portfolio.

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What is factoring?

  • Factoring is a service traditionally offered by banks and finance companies. The service means that companies sell or mortgage their invoices with these players as counterparties
  • The factoring industry is a fast-growing and profitable industry that offers many companies new ways to finance their working capital. Factoring companies offer alternatives to traditional bank loans, with the important difference that factoring does not affect the company's balance sheet
  • Traditional bank financing requires collateral in the form of real estate mortgages or guarantees. In factoring, the acquired invoices provide security
  • Bank financing is usually linked to so-called covenants, which can be translated as a requirement formulated as a financial key figure or other financial or non-financial measure that is set as a condition of a bank when issuing a credit. Factoring requires no covenants 


About the Nordic Factoring Fund

  • NFF offers a unique mutual fund product for private investors
  • The fund provides exposure to the Nordic market for corporate loans via factoring
  • Factoring offers an interesting alternative for those who want an alternative exposure to the credit market. Factoring market has historically been dominated by banks and financial institutions but opened up to new players in the light of new regulation
  • NFF enters into factoring agreements with small and medium-sized corporate customers. The invoices' payment terms are normally 30 to 60 days and a maximum of 120 days
  • The portfolio is insured for credit (95) & #8211; up to about 99 percent
  • The fund aims to offer a return of 7 to 9 percent at a risk, expressed as an annual standard deviation, of less than 2 percent
  • The co-variation with traditional asset classes is expected to be low to nonexistent, which means that the fund should be seen as an important building block in a well-diversified portfolio.  

This is how the fund generates returns in five steps

Nordic Factoring Fund
  1. The investor buys the fund
  2. The fund has agreements with a number of operators or factoring companies that are financed through the invested capital
  3. The factoring companies purchase invoices from companies approved by the fund via factoring
  4. The invoices are pledged in the Fund's name and serve as collateral
  5. The factoring companies ensure that the invoices are paid by the companies to which the invoices are issued and the fund receives interest on the invested capital, which is translated into return for the investor

Who can invest?

Risks

All investments are associated with risks and historical returns are no guarantee of future returns. The funds invested in the Nordic Factoring Fund can both increase and decrease in value, and it is not certain that those who invest in the Nordic Factoring Fund will get back the entire invested capital. Below we list the risks associated with an investment in the fund. Before an investment so should the information brochure and the prospectus read in its entirety.

Liquidity risk
Liquidity risk for a company is the risk that the company will not be able to meet its payment obligations at the due date, ie that the Fund lacks liquid funds to pay, for example, invoices or redemption amounts to Investors on time. The risk arises because the Fund finances itself by issuing Profit-sharing loans, which entail payment obligations to Investors.
The risk may increase if the Fund finds it difficult to raise capital. Liquidity risk may also arise in the Fund's Portfolio, if the assets the Fund has invested in would be difficult to sell or if the Fund finds it difficult to liquidate the Portfolio or if it takes longer than expected to liquidate positions and sell investments.
Liquidity risk means for a bond that it is not possible to sell the bond prematurely. Under normal market conditions, Marknadsgaranten offers a buying price for those who want to sell early. Although bonds in the form of profit-sharing loans have become more established in recent times, the secondary market is still limited. There is therefore a risk that the liquidity of the Profit Sharing Loans is low, and that they are traded at a price below the issue price.
Sometimes it can be difficult or impossible to sell Profit-sharing loans during the term and it is then illiquid. This may occur, for example, in the event of strong market movements, changes in liquidity, changes in regulations, hedging of positions, market disruptions, communication interruptions or other events which may lead to difficulties in trading at reasonable prices or due to the closure of the market or affected marketplaces. or that trade is subject to restrictions for a certain period of time.
Interest rate risk
Interest rate risk The value of the loan share is to a large extent dependent on a number of different factors. One of such factors is the market's general interest rate level, which is why investors in the fund's profit-sharing loans should understand that the development of returns can be adversely affected by changes in interest rates in the markets in which the fund and borrowers operate.
Return Investment Risk
Long-term return opportunities on the profit-sharing loans issued by the Fund are highly dependent on the Fund finding new lending items that require financing and which are also suitable based on the requirements set by the Fund.
Macroeconomic risk
A sharp downturn in the country's or region's economy can affect companies' ability to pay interest and can also result in loan repayments not being completed on time or failing completely. For the Fund, this means a risk that the invested capital will not remain intact or that the return on the invested capital will not be as high as expected or not fully realized. However, the AIF has made an analysis of other funds in other countries that have similar strategies that showed that the funds were not affected at all during, for example, the recent financial crisis.
marketing Risk
The fund's product is relatively new and unknown to smaller investors, so it may be difficult to reach out and attract sufficient investors.
Value development of investments
The fund offers short-term direct lending to small and medium-sized companies to achieve the target, which is a high risk-adjusted return with little or no correlation with other asset classes. Thus, there is no guarantee that the fund's investments will produce the expected return, or that the value of the invested capital is kept intact, and that there is no guarantee that invested capital can be recovered upon redemption. It should be emphasized that the fund will to a large extent invest in small and medium-sized companies that have good liquidity and financial position and who need extra capital for various projects. This means that the fund differs from the objects that private individuals usually have the opportunity to invest in, and also means that you as an investor get a spread of risk that is otherwise difficult to achieve as an individual investor.
Trading with Nordic Factoring Fund profit sharing loans
Investment in the company's profit-sharing loan should primarily be seen as an investment for the entire term of the bond. Profit-sharing loans are freely transferable with the restrictions that apply to the right. The profit share loans will be listed on NGM-NDX where they are priced continuously.
The duration of the investment opportunity and volatility
Investment in the Fund's strategy is associated with risk, also in terms of its duration. However, the Fund estimates that the investment opportunity will remain as long as the banks' capital requirements are at least at the same high level as today. In addition, the Fund's investment strategy is relatively cyclically sensitive, provided that market conditions do not deteriorate significantly.
currency risks
The fund may make investments of a certain portion of the capital in currencies other than the Swedish krona. The fund intends to hedge the investments made in currencies other than the Swedish krona, which is why the risk is considered small.
Credit
The Fund's investment strategy involves a certain credit risk as there is always a risk that the loaned capital will not be repaid to the Fund at the end of the loan's term, which may affect the return. In the event of a significant deterioration in the fund's position, the fund may become unable to fulfill its obligations under the investment agreements concluded with the bondholders.
Föregående
Nästa
2021-04-27
2021-04-29
2021-05-03

Current subscription dates

LAST SUBSCRIPTION DATE
LAST DAY FOR CASH DEPOSITS
SUBSCRIPTION DATE

Issues a maximum of SEK 100,000,000

2021-08-31
2022-01-04
2022-01-14

Current withdrawal dates

REDEMPTION FORM TO US
SETTLEMENT DATE
WHEN PAYMENT IS MADE

Fund Performance

MONTHLY NAV DEVELOPMENT AFTER FEES

Monthly reports

Financial Calendar

Press Releases

2021-04-14Issue and issue information
2021-04-01Nordic Factoring Fund AB (publ) - Announces NAV course 101.66 for March 2021
2021-03-12Issue and issue information
2021-03-01Nordic Factoring Fund AB (publ) - Announces NAV course 101.09 for February 2021
2021-02-25Nordic Factoring Fund AB (publ) - Year-end report 2020
2021-02-11Issue and issue information
2021-02-01Nordic Factoring Fund AB (publ) - Announces NAV course 100.62 for January 2021
2021-01-04Nordic Factoring Fund AB (publ) - Announces record date 2021 and NAV price 105.71 for December 2020
2020-12-08Issue and issue information
2020-12-01Nordic Factoring Fund AB (publ) - Announces NAV course 105.21 for November 2020
2020-11-12Issue and issue information
2020-11-02Nordic Factoring Fund AB (publ) - Announces NAV course 104.67 for October 2020
2020-10-14Issue and issue information
2020-10-01Nordic Factoring Fund AB (publ) - Announces NAV course 104.10 for September 2020
2020-09-17Issue and issue information
2020-09-02Nordic Factoring Fund AB (publ) - Announces NAV course 103.56 for August 2020
2020-08-31Nordic Factoring Fund AB (publ) - Publishes Interim Report 2020
2020-08-04Nordic Factoring Fund AB (publ) - Announces NAV course 102.99 for July 2020
2020-07-13Issue and issue information
Olderhttps://news.cision.com/se/nordic-factoring-fund-ab/

Document

Before investing in the Nordic Factoring Fund, it is important that you read the written material about the fund in order to make an informed decision. It is important that you understand the risks of the fund as well as how it operates. Therefore, you should carefully read the fund brochure, the basic fact sheet as well as the prospectus and its additions. You will find all relevant documents here:

Fund Management Principles

Investment Process
The investment objects are approved by an investment committee after a well-developed credit process. The Fund strives to consistently engage with borrowers whose expected return is attractive in relation to the credit risk that the commitment entails. The individual commitments are weighed against each other in order to achieve an efficiently balanced credit risk for the fund as a whole. The investment objects have a low correlation with other markets and the risk in the fund should primarily be driven by credit risk and return for the fund as a whole.

Direct lending to companies
The fund's lending objects are primarily found throughout Scandinavia and are aimed at companies that are in some form of expansion, investment, refinancing, restructuring, generational financing, seasonal or other needs.

Fund shares
The Fund may, on a selective basis, invest funds in fund units in similar funds without geographical limitation.

Derivative
The fund has the opportunity to use derivative instruments, partly to reduce such undesirable risks and partly to obtain exposures that are deemed attractive to the fund and its risk profile.

Interest-bearing instruments
The fund can invest liquidity in bonds.

Deposits to bank
The fund may place liquidity with credit institutions after a credit check.

Profit Sharing Interest

The Nordic Factoring Fund's return (annual profit share rate) will be converted into new profit share loans to the profit share loan holders. For each financial year, the Fund shall determine the Profit Share Rate for the management of the Investment Portfolio in accordance with generally accepted accounting principles.

Profit share interest accruing to the Profit Share Loan holders shall be made on the Interest Maturity Date by issuing additional Profit Share Loans. The profit share rate shall be rounded down to the nearest krona and rounded off at the custodian institution level.

On January 13, the rate will be reduced to 100.00 after booking the Profit Share Rate and the new nominal amount for the Profit Loan should be shown in the respective custody account on January 23.

Important! This means that during the period from January 13 until the custodian institution has issued the new Profit Sharing Loans, there appears to be a negative return on the deposit.

How can the Profit Share Rate and Value be calculated?

Example 1
Investment in the fund was made on 1 February 2017

Invested capital SEK 100,000 at NAV rate 100.43. It gives a nominal SEK 99,500 (100,000 / 1,0043 = 99,571, which is rounded to 99,500)

The value of the investment on 1 February 2017 was SEK 99,927 (99,500 * 1,0043).

The NAV rate on January 2, 2018 is 108.13 before the issue of Profit Share Interest.
The value of the investment on January 2, 2018 was SEK 107,589 (99,500 * 1,0813).

The return (Profit share interest) is paid to the investor in the form of new profit share loans, giving the total nominal amount SEK 107,589 *)
New NAV rate 10/1 2018 is 100.00 after the issue of Profit Share Interest

The value of the holding after the issue of new profit share loans will then be SEK 107,589 (107,589 * 1,0000)

Example 2
Investment in the fund was made on July 3, 2017

Invested capital SEK 100,000 at NAV price 104.08. It gives a nominal SEK 96,000 (100,000 / 1,0408 = 96,079, which is rounded to 96,000).

The value of the investment on July 3, 2017 was SEK 99,916 (96,000 * 1,0408)

The NAV rate on January 2, 2018 is 108.13 before the issue of Profit Share Interest.
The value of the investment on January 2, 2018 was SEK 103,804 (96,000 * 1.0813).
The return (Profit share interest) is paid to the investor in the form of new profit share loans, which gives the total nominal amount SEK 103,804 *)

New NAV rate 10/1 2018 is 100.00 after the issue of Profit Share Interest
The value of the holding after the issue of new Profit Shares will then be SEK 103,804 (103,804 * 1,0000)

*) As rounding of the Profit Share Rate occurs at the custodian level, the new nominal amount may vary from these examples.

Note that after the Swedish Financial Supervisory Authority's approval of the AIF Fund's addition to the prospectus in December 2017, the nominal amount has changed from SEK 100 to SEK 1.

Traded Markets

The main activity of the Fund is to provide loan capital to small and medium-sized companies with funds that influence the offer through this prospectus. The fund's lending objects are primarily found in Scandinavia. The fund may also invest on a selective basis in fund units in similar funds or through co-financing with national or international partners without geographical limitation. Through this, the fund intends to create an investment that has lower risk than equities and better return potential than traditional fixed income investments.

Management Fee

Management fees are paid partly in the form of a fixed remuneration and partly in the form of a profit-sharing remuneration.

The fixed remuneration amounts to 1.6 per cent per year. The fixed remuneration is paid quarterly.

Profit sharing amounts to 20 percent of the fund's value increase in addition to the average return on 3-month government debt bills after the "high watermark". High watermark means that the fund only pays performance-based fees after any sub-return from previous periods has been compensated. The earnings-based remuneration is paid annually.

Commissions, clearing fees and other transaction costs attributable to the Fund's investments are paid on an ongoing basis by the Fund.

Redemption

Sales and redemption of profit share loans are made on the first banking day of each month.

Notification must be made on a special form. (Subscription can be made for 4 banking days before each change of month, February to December, not January)

You can also subscribe with BankID via mangold.se/emission/teckning

The minimum amount for subscription is SEK 100,000.

Request for redemption

The request for redemption must be made by the Issuer no later than four (4) months before the end of the year, ie no later than September 1, before the Banking Day for which the redemption is requested. However, investors who have requested redemption within the prescribed time have the right to cancel (withdraw) their notification of redemption by 1 October. However, the redemption request can only be withdrawn if the Issuer allows it.

The request for redemption at another time may be submitted to the Board and granted, provided that it is possible to match the withdrawal with a new deposit at the next monthly change.

Redemption takes place at the NAV rate that is determined at the end of the calendar year closest to the redemption date. The profit share loans shall be redeemed on request on the seventh (7) Banking day following the Redemption Day. The redemption amount must be paid in cash to Investors who have requested redemption.

Redemption form