2021 Review: A record year based on sustainable development

February 24, 2022

Our vision is to be a Nordic private assets powerhouse. Our strategy based on this vision has progressed on many fronts during 2021. We have expanded our fund investor base, diversified our product offering in the unlisted market and focused on active and sustainable value creation.

2021 was CapMan’s strongest year as a listed company, measured by turnover and operating profit. Turnover for the year was €53 million and operating profit was €45 million. Assets under management reached €4.5 billion record levels. Key drivers behind the record result are strong international fundraising, successful value creation work and well executed exits.

Sustainable development as a foundation for value creation

Our mission guides our strong results to build value for the enrichment of society. CapMan’s societal impact is significant. Our portfolio companies employ a total of 13,000 people with a combined turnover of €2.2 billion. We also manage real estate with a combined area of approx. 1,300,000 square meters and a total of approx. 6,300 tenants, including large corporations and institutions as well as thousands of households. We have an opportunity and a strong drive to develop our portfolio companies and real estate into more environmentally friendly, socially responsible, and well-governed assets, thereby contributing to a more sustainable society. Our ability to offer good returns while taking sustainability aspects into account is a central reason for why we are the primary choice of a private markets partner in the Nordics for so many clients.

Clear sustainability targets for operations

During the past year, we have increased our resources for sustainability work, developed the systematic integration of sustainability factors into our business and focused on assessing the sustainability impacts of our investments.

An outcome of the sustainability work conducted during the year was a new strategy to integrate sustainability objectives. As part of this work, we have established sustainability targets for CapMan Group as well as for funds managed by CapMan. In terms of environmental targets, CapMan commits to setting Science Based Targets (SBT) for its activities that mitigate climate change in line with the Paris Agreement. Long-term, our objective is to be a fully carbon-neutral company. From a social perspective we commit to promote diverse and inclusive work communities and maintain employee satisfaction at a measurably high level. We also focus on promoting the gender division of decision makers so that one gender would not be clearly overrepresented. Furthermore, we are planning to integrate sustainability objectives into executive remuneration. By setting clear targets and monitoring of progress towards those targets, we can ensure that we promote those areas that we can influence directly through active ownership.

Strong international fundraising, successful value creation and well executed exits drive record results.

A record year by many measures

We were successful during 2021 over the life cycles of our funds, from the fundraising phase to exits.

Our assets under management increased by €700 million, or close to 20 per cent as a result of the establishment of new funds. In 2021, we established a new residential real estate fund, a fund that invests in businesses undergoing transformations and a new private credit fund, among others. Increasing the share of international investors is one of the cornerstones of our fundraising strategy.  We successfully attracted several new large international institutions as investors in our new funds. Investors outside the Nordic countries now contribute to approx. 60 per cent of our assets under management. This share has grown from approx. 10 per cent in 2017. In addition, the number of smaller local investors has grown steadily.

We have found plenty of suitable investment opportunities in an active transactions market. We invested a total of 660 million through our funds in 2021.

Future returns are based on value creation today

Value creation in our portfolio companies and real estate has been successful, which is reflected in fair value changes of investments made from our own balance sheet. In 2021, fair values increased by 27 per cent and included returns from exits as well as still unrealised fair value gain. Net cash flow to CapMan from investments was a solid €18 million.

During the past year, we have completed several successful exits, which have returned capital and distributed returns to investors at a total of €250 million. We exited a total of 11 companies and real estate assets.  Successful value creation is also demonstrated by funds that have been transferred to carry or that are approaching this milestone. When a fund transfer to carry, also the fund General Partner, i.e. CapMan, receives a share of the returns.

Growing fees

Fund management fees and fees from services are an important part of CapMan’s income mix. Fee-based profitability has continued its positive trend for several years. We focus on the long-term growth of fee-based profitability and expect this development to continue strong also this year.

We have developed our service concepts during the year. As an example, CapMan’s wealth management arm CapMan Wealth Services launched its first international co-investment solution together with international private assets manager AlpInvest. This fund-based solution invests in sought after US mid-market buyout funds alongside AlpInvest. The tailored product is part of CapMan’s strategy to expand and diversify its product portfolio by offering local investors access to the unlisted market also outside the Nordic region.

CaPS continues to grow in Finland and Sweden while operations have started also in the Baltics. JAY Solutions has acquired new customers for their reporting and analytics service offering also among B2B clients.

Top professionals enable future growth

CapMan’s growth and positive development is driven by the best professionals in the industry. During 2021 we have strengthened our ranks by recruiting new talent. This provides a solid foundation for future growth. Our knowledgeable staff is our most important asset and we have invested in improving employee satisfaction by increasing flexibility regarding work location and hours, for example. Despite two years of exceptional circumstances due to the pandemic, I am happy to note that the work community is highly appreciated and that it is one of the reasons why people want to work at CapMan and why they thrive.

We have raised the bar for our business and results during 2021. In the coming years, we will maintain our focus on growth and especially on the internationalisation of our business. Active and sustainable value creation is at the core of our activities. This combination of growth and value creation improves our financial performance and helps us execute our vision to be a Nordic private assets powerhouse.

Joakim Frimodig
CEO

Read more in our Annual Report!