Adrigo Small & Midcap L/S Class A and Class C declined by 3.3% in July after fees. By comparison, the Carnegie Small Cap Return Index Nordic rose by 3.1% and Carnegie Small Cap Sweden gained 2.5% during the month.
After Staffan Östlin left the role of lead portfolio manager of Adrigo in mid-July, Espiria's investment team assumed responsibility for the fund and has continued the work initiated in the spring to broaden the portfolio and reduce risk.
The work, which began in April, has increased exposure to quality companies with larger market capitalisations outside the micro-cap segment. At the same time, exposure to less liquid and unlisted holdings has been gradually reduced. At the end of Q2, exposure to unlisted companies amounted to just under 7% of the total portfolio. Since then, the portfolio's liquidity profile has improved further, with the combined share of illiquid and unlisted holdings reduced to less than 30% of the total portfolio.
The portfolio adjustments continued in July and had a slightly negative impact on returns for the month. At the same time, several of the more recent investments performed positively, providing a broader foundation for the portfolio's future performance.
Since inception, Adrigo Small & Midcap L/S Class A has returned 0.8% after fees. Over the same period, the fund's reference rate, STIBOR 1M, has returned 10.6%, while the Carnegie Small Cap Return Index Nordic (not a benchmark index) has returned 122%.
Holdings and changes
To improve portfolio balance, a number of new holdings were added between April and July. These include SKF (industrial, bearings), Getinge (medical technology), Asker Healthcare (supplier of medical technology products), Bakkafrost (salmon farming), Systemair (ventilation and climate control), Enea (communications consulting services) and Thule Group (sports and leisure equipment).
At the same time, several large positions in relatively small companies were reduced, including Online Brands (e-commerce), Initiator Pharma (biotechnology and pharmaceuticals), BrainCool (medical technology) and Nobia (manufacturer of kitchens and kitchen furnishings). A new investment was also made in Tången Industrikapital in connection with the company's IPO.
Following these changes, the portfolio now comprises around 40 holdings, with a typical individual position representing approximately 2% of the portfolio. The fund's short positions have also been reduced and now account for less than 10% of total exposure.
The work continues with a focus on improving liquidity, maintaining effective risk diversification and ensuring a balanced portfolio.
