ODIN Fund Management

ODIN Fund Management
Top Nordic Value from
Bottom-up Fund Management
31st of April 2009
Mikael Wickbom
mikael.wickbom@odinfond.no
MD ODIN Fonder
Cecilia Seddigh
cecilia.seddigh@odinfond.no
Head of Business Development UK
1
ODIN Fund Management
•
Established in 1990
•
ODIN is owned by the Norwegian saving bank Sparebank 1
Gruppen AS
•
Emloyees 80 (50 in Oslo, Norway)
•
Offices in Norway, Sweden and Finland
•
Registered for distribution in Norway, Sweden, Finland,
the Netherlands and the UK
•
Second largest fund manager in Norway. ODIN’s funds have
280.000 unit holders. AUM, equity funds approx 2,4bn Euro
2
ODIN Forvaltning AS Organisation
CEO
Leif Ola Rød
Administration
Business Compliance
Economy
Chathrine Feght/Åsa Leander *)
Chief Information Officer
Svein Carlsson
CIO
Jarl Ulvin
Head of Fund
Administration
Director Marketing
and Sales Norway
CEO Branch
Sweden
Ove Sletten
Petter Nordeng
Mikael Wickbom
Fund Managers
Back Office
Institutions
Sales and Marketing
Eq Analysts
Admin
Intermediaries
Admin
Mid Office
Marketing &
Communications
International
Business Dev
CEO Fondex OY
Mikael Wickbom
Rahastotori OY,
Fondtorget AB
CEO: Sam Olin
Private
NL
Intermediaries
UK
Institutions
3
Ownership
SpareBank 1
SR-Bank
19,5%
SpareBank 1
Midt-Norge
19,5%
SpareBank 1
Nord-Norge
19,5%
SpareBank 1
Hedmark
12,0%
Co-operating
savings banks
19,5%
Norw. Fed. of
Trade Unions
10,0%
SpareBank 1 Gruppen AS
ODIN
Forvaltning
AS (100%)
Bank Co-operation Programme
Centres of Excellence
IT-co-operation
Risk Management
Credit Systems
Payment - cards and services
Corporate Governance
Internet and telephone banking
CTI
Industrial and structural matters
4
Investment strategies – an overview
INVESTMENT STRATEGY
ACTIVE INDEX INDEPENDENT
PASSIVE INDEX ORIENTED
FUNDAMENTAL
MOMENTUM
GROWTH
VALUE
Investments
based on trend
curves.
Focus on
companies
believed to
have strong
earnings
growth
potential.
Focus on stocks
that appear under
valued by the
market.
ENHANCED
INDEX
PURE
INDEX
Investements according
to an index.
5
Value vs Growth
Running 5 yrs accumulated performance
Percentage
225
MSCI World Indicies
225
200
200
175
175
150
150
125
125
100
100
75
75
50
50
25
25
0
0
-25
-25
-50
Growth
Value
© ODIN Forvaltning / Kildedata: ODIN og OBI
-50
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
6
Value ”come back”
Source: Morgan Stanley
7
ODINs investment philosophy
consistent since 1990
•
Active management
•
Thorough fundamental analysis
•
Applied value orientation
•
Corporate governance
8
ODIN vs. the market
•
ODIN’s equity funds are actively managed.
•
At ODIN we believe that the market is not rational in the short
term, that not all information is priced in.
•
We believe that our managers’ expertise and market insight,
combined with a clear and well thought-out investment
philosophy, gives good returns over time.
•
Our long-term track record is good evidence of this.
9
ODIN vs. growth
•
Value stocks have performed best during the period,
and we believe that they will continue to do so.
•
We concentrate on investing in companies with solid
earnings and strong balance sheets, currently priced
at a substantial discount to their intrinsic value.
•
A growth fund invests in companies and sectors
where there are high hopes for the future – sectors
that are in demand.
10
Investment Process
INVESTMENT UNIVERSE
VALUE SCREENING
No value screening attributes
VALUE UNIVERSE
ANALYSIS
TARGET PRICE
No value attributes
Too high valuation
PRICE POTENTIAL
SHOPPING LIST
No fit
PORTFOLIO
ALLOCATION
Price target met
Negative development
PORTFOLIO
Acquisition
11
Fund Management Team
Nils Petter Hollekim
SR Portfolio Manager
Oddbjorn Dybvad
Portfolio Manager
Lars Mohagen
SR Portfolio Manager
Håvard Opland
Portfolio Manager ASS
Alexandra Morris
SR Portfolio Manager
Vegard Søraunet
Portfolio Manager
Jarl Ulvin
CIO
Mi Kim
Equity Analyst
12
Matrix Organisation
Geographic/Sector Responsibilities
Transport
Shipping
Olje/
Offshore
Real Estate/
Construction
IT
Telecom.
Retailing
Leisure
ODIN
Maritim
ODIN
Offshore
ODIN
Eiendom
L. Mohagen
(LM)
L. Mohagen
(LM)
N.P. Hollekim
(NPH)
A. Morris (AM)
S. Carlsson
(SC)
N.P. Hollekim
(NPH)
J. Ulvin (JU)
JU / OD
LM
JU / OD
LM
JU / OD
NPH
JU / OD
JU / OD
TH
JU / OD
AM / SC
TH
LM
N/A
TH
NPH
TH
JU
TH
ODIN Sverige
N.P. Hollekim
(NPH)
NPH
LM
N/A
NPH
NPH
JU
ODIN Norden
N.P .Hollekim
(NPH)
NPH
LM
NPH
LM
NPH
AM
LM
AM
LM
TH
LM
ODIN Global
J. Ulvin (JU)
O. Dybvad (OD)
V. Søraunet (VS)
ODIN Global SMB
J. Ulvin (JU)
O. Dybvad (OD)
V. Søraunet (VS)
Bransje
Geografi
ODIN Norge
J. Ulvin (JU)
O. Dybvad (OD)
ODIN Finland
T. Haugen (TH)
ODIN Europa
A. Morris (AM)
ODIN Europa SMB
T. Haugen (TH)
Food &
Beverage
Engineering
Capital Goods
Bank/Finance
Forestry
Metals
A. Morris
(AM)
A. Morris (AM)
N.P. Hollekim
(NPH)
T. Haugen
(TH)
JU / OD
NPH
JU / OD
AM
JU / OD
AM / NPH
JU / OD
TH
TH
AM / SC
TH
NPH / JU
TH
AM
TH
AM / NPH
TH
NPH
TH
NPH
AM / SC
NPH
JU
NPH
AM
NPH
AM
NPH
TH
NPH
JU
NPH
TH
NPH
AM/ SC
NPH
JU
NPH
AM
NPH
AM
NPH
TH
AM
NPH
AM
JU
AM
TH
AM
SC
AM
NPH / JU
AM
AM
NPH
AM
TH
TH
LM
TH
NPH
TH
JU
TH
TH
AM / SC
TH
NPH / JU
TH
AM
TH
AM / NPH
TH
JU / OD / VS
LM
JU / OD / VS
LM
JU / OD / VS
NPH
JU / OD / VS
JU / OD / VS
JU / OD / VS
SC
JU / OD / VS
NPH
JU / OD / VS
JU / OD / VS
NPH
JU / OD / VS
JU / OD / VS
LM
JU / OD / VS
LM
JU / OD / VS
NPH
JU / OD / VS
JU / OD / VS
JU / OD / VS
SC
JU / OD / VS
NPH
JU / OD / VS
JU / OD / VS
NPH
JU / OD / VS
J. Ulvin (JU) T. Haugen (TH)
O. Dybvad(OD)
Pharmacy
Biotech
13
Fund Presentation
Value based investment philosophy with
the objective to outperforme the index
14
ODIN Funds
Nordic
Sector
European
Global
15
ODIN Funds
Nordic
Mandate
Sector
Mandate
ODIN Sverige*
Swedish
ODIN Offshore
Global Oil Service
ODIN Norden*
Nordic
ODIN Maritim
Global Shipping
ODIN Finland
Finnish
ODIN Eiendom
Nordic Real Estate
ODIN Norge*
Norwegian
European
Mandate
Global
Mandate
ODIN Europa*
European all Cap
ODIN Global
Global
ODIN Europa SMB
European
Small and
Mid Cap
ODIN Global SMB
Global Small
and Mid Cap
* Institutional mirror funds available
16
Standard & Poor’s Rating
2007, 2008 and 2009
Nordic funds
S&P Rating
Sector funds
S&P Rating
ODIN Sverige*
AA
ODIN Offshore
A
ODIN Norden*
AA
ODIN Maritim
ODIN Finland
AA
ODIN Eiendom
A
ODIN Norge*
AA
European funds
S&P Rating
Global funds
S&P Rating
ODIN Europa*
A (Not rated 2009)
ODIN Global
ODIN Europa SMB
A
ODIN Global SMB
* Institutional mirror funds available
17
Market index
10 years performance EUR, log scale
Norway
Denmark
Sweden
Finland
Europe
18
Correlation 10 yrs
March 1st 1999 – Feb 28th 2009
19
Sector allocation %
Source: Morningstar Direct as of 30.04.2009
20
ODIN Norden vs market index
10 years performance EUR, log scale
800
800
400
400
200
200
100
100
50
50
1999
2000
2001
2002
Odin Norden, NAV, EUR
World, MSCI, Index, Gross Total Return, End of Period
2003
2004
2005
2006
2007
2008
2009
Nordic Countries, MSCI, Index, Gross Total Return
MSCI, AC Europe, Gross, Index
© ODIN Forvaltning / Kildedata: Reuters EcoWin
21
ODIN Funds Nordic Equity Funds
Nordic
Mandate
ODIN Sverige
Swedish
ODIN Norden
Nordic
ODIN Finland
Finnish
ODIN Norge
Norwegian
22
ODIN Norden
•
Established: June 1 1990
•
Portfolio manager: Nils Petter Hollekim
•
ODIN Norden freely invests, regardless of the industry, in
limited liability companies listed on the stock exchange,
whose head offices or origins are in Sweden, Finland,
Denmark or Norway.
•
The long-term aim of the fund is to give a higher return
than the Nordic equity market
(reference index: VINXBCAPNOKNI)
23
ODIN Norden
Geographic allocation
•
Norway: 42,8%
•
Sweden: 23,9%
•
Finland: 23,6%
•
Denmark: 5,1%
Ref Index: VINX Cap NOK NI
24
ODIN Norden
Largest holdings 31 April 2009
Performance Euro
Last 3 yrs
-45,55%
Wilh Wilhelmsen B
3,77%
Last 5 yrs
26,65%
Fred Olsen Energy
3,50%
Since inception (900601)
863,22%
Solstad Offshore
3,46%
Annualised since inception
12,71%
Svenska Cellulosa B
3,42%
YTD
16,95%
Kongsberg Gruppen
2,98%
G4S
2,87%
Sampo A
2,86%
Investor B
2,72%
Astra Zeneca
2,71%
Orkla A
2,51%
AuM MEuro:
666
Ref Index: VINX Cap NOK NI
25
ODIN Norden
Performance since start
Ref Index: VINX Cap NOK NI
26
ODIN Norden
Performance April
•
April ended with a rise of 20.8 per cent for ODIN
Norden. The fund’s benchmark ended the same
period up 22.3 per cent.
•
The Swedish market rose by 25 per cent in April.
With a predominance of Norwegian shares, we did
not quite manage to match our benchmark’s
developments.
27
ODIN Norden
Contributors April
•
The Finnish packaging company Huhtamaki, transport and
logistics company Wilh. Wilhelmsen and Austevoll Seafood,
a seafood and fish-feed manufacturer, contributed a good
return to the fund. Swedish hygiene and paper company
SCA made a large positive contribution.
•
There were no major negative contributors during the month.
The only company that made a slightly negative contribution
was Danish security company G4S. Defensive pharmacy
companies and ABB also developed relatively badly.
28
ODIN Norden
Outlook
•
In the future, we will to some extent realise our gains on
companies whose share prices have increased strongly
and are approaching our target share prices.
•
In addition, we will continue to build on our investments in
the utilities, pharmacy and service sectors.
29
Portfolio Cases: Pronova Biopharma
VALUE DRIVERS
• Strong top line
growth
• Increased margins
• Solid balance
sheet
• Transperant
business model
• Value based on
DCF: 35-40 NOK
MANAGEMENT
• Dedicated and
competent
management
• Understands the value
drivers
• Excellent investor
relations
• Company visit
quarterly with
management and
production
COMPANY
• Patents that protects
to 2017
• Life cycle management
• Generica not earlier
than May 2012
• Expanded clinical lable
through extended areas
of applications
INDUSTRY
MEGA TRENDS
• Pharmaceutical
• Obesity
• Cardio vascular
• Diabetes, Cardio
Vascular diseases
• Triglycerid and possibly
heart arythmea and
inflammation
• Global Cardio Vascular
>100 Bn USD
• Increased part
take of medicine
causes side-effects
30
Portfolion Cases: Security
World leading security solution groups
•
Strong market position and pricing power
•
The industry segment's growth rate exceeds
GDP growth
•
A business infrastructure with local presence
•
Management
•
The industry segment has defensive qualities
31
Portfolion Cases: Industrial
World leading industrial companies
•
Pricing power and high margin products
•
AlfaLaval and SKF – strong balance sheet
•
Sandvik – improvement of CF
•
R&D
•
Product and market diversification
•
Early and mid life cycle companies
•
Low valuations
32
ODIN Norden
Holding based style trail
33
ODIN Norden
Sector allocation 2003 – March 2009
34
ODIN Norden, Pricing
ODIN Norden vs VINX 2009
Nordic Market (Div %)
Source: Factset, consensus
estimate as of 08.05.2009
4,0
ODIN Norden (Div %)
5,2
1,2
Nordic Market (P/B)
0,8
ODIN Norden (P/B)
11,0
Nordic Market (P/E)
8,1
ODIN Norden (P/E)
0,0
2,0
4,0
6,0
8,0
10,0
12,0
35
ODIN Funds Sector funds
Mandate
•Sector
ODIN Offshore
ODIN Offshore
Global Oil Service
ODIN Maritim
Global Shipping
ODIN Eiendom
Nordic Property
• ODIN Maritim
36
ODIN Offshore
•
Established: August 18 2000
•
Portfolio manager: Lars Mohagen
•
ODIN Offshore can only invest in companies that are
primarily engaged in the oil and gas sector, which includes
other service companies and companies engaged in
recovery, production, processing and transport/distribution.
•
The long-term aim of the fund is to give a higher return
than the equity market for oil service companies (reference
index: Philadelphia Stock Exchange Oil Service Index).
37
ODIN Offshore
Largest holdings 30 April 2009
Performance
Last 3 yrs
-46,09%
Pride International
8,12%
Last 5 yrs
91,21%
Noble
6,91%
Since inception (000818)
37,94%
Bonheur
6,87%
Transocean
5,62%
Rowan Companies
4,83%
Ensco International
4,22%
Kongsberg Gruppen
4,04%
Fred Olsen Energy
4,02%
Petroleum Geo Services
3,93%
Farstad Shipping
3,70%
Annualised since inception
3,76%
YTD
AuM MEuro:
26,75 %
215
Reference index. Philadelphia stock exchange oil service sector index (PHLX OSX)
38
ODIN Offshore
Performance since start
Reference index. Philadelphia stock
exchange oil service sector index
(PHLX OSX)
39
ODIN Offshore allocation
Geographic
•
Norway: 56%
•
USA: 39%
•
Others: 5%
Segments
•
Rigg: 45%
Supply: 15%
•
Seismic: 10%
E&P: 5%
•
Wharf and Equipment: 10%
Floating prod: 15%
Reference index. Philadelphia stock exchange oil service sector index (PHLX OSX)
40
ODIN Offshore
Holding based style trail
41
ODIN Offshore, Pricing
ODIN Offshore vs PHLX 2009
Offshore marknad (Div %)
0,9
1,8
ODIN Offshore (Div %)
1,2
Offshore marknad (P/B)
0,7
ODIN Offshore (P/B)
7,9
Offshore marknad (P/E)
5,7
ODIN Offshore (P/E)
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
8,0
9,0
42
ODIN Offshore
Why oil service industry?
•
Lower GDP growth leads to decreasing oil price.
However long term growth potential in China and India.
•
Low surplus of production capacity
•
Depletion of existing oil fields
•
Large oil reserves in politically instable regions.
OPEC keeps control of supply. Nationalisation of fields.
•
Perferred segments
- Rig
- Suppy
- Seismic
43
World oil production in the reference scenario.
Report IEA World Energy Outlook 2008
44
Reserves in political instable regions
45
Historical oil price
46
Demand for oil function of GDP
47
Budget oil price
48
Capacity coverage Global Deepwater fleet
49
ODIN Offshore: Jack-ups
•
Mobile unit
•
Semi submersible (“jack-up”)
•
Applied on depth to 90 meters
50
ODIN Offshore: Semi submersible rigs
•
Stationary and mobile units
•
Adjustable relative sea level through ballast adjustment
•
Applied on surface from 180 to 1.800 meters
51
ODIN Offshore: Drill ships
•
Applied on deep water prospecting
•
Built on modified hull
•
Dynamic positioning systems fixes the vessel
•
Applied on deep water down to 3.000 meter
52
ODIN Offshore:
Floating production systems
Sevan Stabilised Platform (SSP)
•
Innovative, round floating production and storage unit (FPSO)
•
Drilling version in progress for development
•
Very stable unit
•
Developed for deep water
53
ODIN Offshore: Supply segment
Anchor Handling Tug Supply
Anchor handling
Tug/installation of platforms
Standby rescue vessel
Platform Supply Vessels
Deliveries
P/E (08)
P/E (09)
P/E (10)
DOF
7,9
5,4
3,2
Farstad Shipping
3,0
3,2
4,9
Solstad Offshore
6,6
4,3
4,9
ODIN Offshore
5,4
4,6
5,2
54
ODIN Offshore: Seismic
Seismic = gathering and handling of data
55
ODIN Offshore
Performance April
•
April ended with a rise of 17.1 per cent for ODIN Offshore.
The fund’s benchmark ended the same period up 22.3 per
cent.
•
April was a positive month, characterised by optimism on
the macro side, a much greater willingness to take risks
and a sharp rise in some companies’ share prices.
•
The price of oil was more or less unchanged at the end of
the month – despite a further reduction in the global
demand for oil and sharp increase in OECD stocks.
56
ODIN Offshore
Contributors April
•
The best contributors to the return last month were US
drilling companies Pride and Rowan. Norway’s BWO also
made a good contribution, with a rise of just over 40 per
cent.
•
Among the negative contributors was Norway’s TGS
Nopec. This company fell by around ten per cent after
issuing a profit warning for its first quarter figures.
57
ODIN Offshore
Outlook
•
Several portfolio companies are now priced significantly
lower compared to their key figures than when the price of
oil was at USD 10 a barrel in 1998.
•
We believe the market has priced in too pessimistic a
scenario and can see considerable potential in a slightly
more long-term perspective.
58
ODIN Maritim
•
Established: October 31 1994
•
Portfolio manager: Lars Mohagen
•
ODIN Maritim can only invest in companies that are
primarily engaged in global maritime transport.
•
The long-term aim of the fund is to give a higher return
than the equity market for maritime transport (reference
index: MSCI World Gross Marine Index).
59
ODIN Maritim
Largest holdings April 30, 2009
Performance Euro
Last 3 yrs
-37,34%
Stolt Nielsen
8,02%
Last 5 yrs
58,36%
Samsung Heavy Ind
7,45%
Since inception ()
510,05%
Bonheur
7,23%
13,28%
AP Möller Maersk
6,32%
9,87%
Hyundai Heavy Ind
4,55%
Ganger Rolf
4,26%
Neptune Orient Lines
3,71%
Star Reefers
3,70%
Modec
3,53%
Wilh Wilhelmsen A
3,49%
Annualised since inception
YTD
AuM MEuro:
85
Reference index. MSCI World Marine
60
ODIN Maritim
Performance since start
Reference index. MSCI World Marine
61
ODIN Maritim
Holding based style trail
Reference index. MSCI World Marine
62
ODIN Maritim, Pricing
ODIN Maritim vs MSCI The World Index Transportation Bench 2009
Maritim marked (Div %)
2,7
ODIN Maritim (Div %)
2,8
1,4
Maritim marked (P/B)
0,6
ODIN Maritim (P/B)
14,9
Maritim marked (P/E)
8,2
ODIN Maritim (P/E)
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
16,0
Source: Factset, consensus estimate as of 08.05.2009
63
The Maritim case
Before recession
Current state
•
Most important trigger for demand is
the global economy
•
Negative GDP development in most
economies
•
Globalisation leads to new freight
patterns and higher demand for
transportation of goods
•
Tonnage surplus capacity due to
excess production of vessels
•
Financial problems for companies,
with bankruptcy and M&A to expect
•
Over contracting is a challenge, but
there is a great uncertainty regarding
•
future contracts (economic cyclicality)
•
Increased costs squeeze margins
•
Uncertainty regarding future earnings
•
Expectations on slow recovery Q4 for
some shipping segments
Speculative industry segment with
early cycle patterns
64
The Maritime industry diversity
•
Oil tanker

Container ship
•
Product tanker

Ro-Ro ship
•
Dry bulk

Chemical tanker
•
Reefers

Gas tanker
65
ODIN vs Index
Annualised return last 5 years Euro
%
Data as of 30.04.09
66
ODIN vs Index
Annualised return last 10 years Euro
%
Data as of 30.04.09
67
ODIN vs Index
Annualised return since inception EUR
%
Data as of 30.04.09
68
ODIN Finland rank no 1 out of 1.771 funds
Annualised return since inception 18,23%
As of 31st March 2009, Currency: Euro
69
Investment conditions
Institutional Funds
ODIN Europa II, ODIN Norden II, ODIN Sverige II, ODIN Norge II
•
Minimum subscription
NOK 10.000.000 (appr GBP 900.000)
•
AMC
0,9%
•
Redemption fee
0,5%
Costs relating to redemption are waived if the unit holders have owned the units
for at least one year.
70
Investment conditions
Retail Funds
ODIN Global, ODIN Global SMB, ODIN Europa, ODIN Europa SMB,
ODIN Norden, ODIN Sverige, ODIN Finland, ODIN Norge, ODIN Offshore,
ODIN Maritim, ODIN Real Estate
•
Minimum subscription
One-off purchase
NOK 3.000 (appr 300 GBP)
•
AMC
2,0%
•
Subscription fee
3% - 1%
•
Redemption fee
0,5%
71
Regulatory information
This document is intended for institutional investors only.
Past performance is not a guide to the future. The value of
investments may go down as well as up and investor may not get
back the value of their original investment.
ODIN Forvaltning AS, org nr 957 486 657, is regulated by the
Financial Supervisory Authority of Norway, Kredittillsynet.
72
ODIN Fund Management
Top Nordic Value from
Bottom-up Fund Management
27 and 28 th May 2009
Mikael Wickbom
MD ODIN Fonder
Cecilia Seddigh
Head of Business Development UK
73