Adrigo Small & Midcap L/S Class A and Class C gained 0.94% in August after fees. By comparison, the Carnegie Small Cap Return Index Nordic rose 4.4% and Carnegie Small Cap Sweden gained 2.6% during the month.
Swedish equities advanced in August, with small- and mid-cap companies performing well. Improved risk appetite and more stable expectations in the interest-rate market encouraged investors to increase their exposure to the segment. At the same time, share-price performance remained highly company-specific, with several smaller small-cap companies lagging behind.
Since inception, Adrigo Small & Midcap L/S Class A has returned 1,79% after fees. Over the same period, the Carnegie Small Cap Return Index Nordic (not a benchmark index) has returned 131,5%.
Holdings and changes
The fund’s largest holding, Initiator Pharma, which develops treatments for erectile dysfunction, performed weakly and detracted from returns. The research company has presented positive data from a Phase II study. The next step is expected to be identifying a partner ahead of a larger Phase III study, with a view to future commercialisation if the results are positive.
During late spring and summer, we gradually reduced the fund’s risk level and broadened the investment universe. In addition to Initiator Pharma and the unlisted Howwe Technology, Hansa Biopharma, SKF, Getinge, Tången Industrikapital and Camurus are among the Fund’s largest positions.
We have continued our efforts to create a better-balanced portfolio. As part of the transition to a long-only strategy, short positions have been reduced substantially and will be fully exited in connection with the conversion to UCITS on 1 October. At the same time, the focus is on increased diversification and liquidity, as well as quality companies within the small- and mid-cap segment.
