Interesting to see James Anderson of BG and SMT move over to chairing Kinnevik, a Swedish investment company that looks and feels a bit like Prosus.
Here is another family-backed investment vehicle that mixes listed investments (Zalando) and private, non-listed start-ups. T
The focus is, as you would expect, very technology-based with a particular emphasis on e-commerce. But there is also a very successful healthcare investment in the shape of Teladoc, which I also happen to own.
On paper, the Swedish business is trading at a premium of just under 10% to NAV which isn’t entirely outrageous but if one were cynical I would argue that it looks expensive compared to Prosus which is trading deep below NAV (a large part of which is Tencent).
Then again, this is a more diversified portfolio than Prosus. Now that Anderson is chair of the board, I would expect a higher public profile for the investment company in the Anglo Saxon markets and I would also expect that we might see a steady stream of interesting new businesses approaching Andreson at his new berth!
Some recent highlights from the trading statement on Kinnevik:
- Global Fashion Group successfully raised 120 million euros via a share placement.
- The company participated in 160 million dollars funding round in Cityblock valuing the company at more than 1 billion dollars and a
- 526 million Swedish krona funding round in Budbee led by AMF.
- The partnership between VillageMD and Walgreens Boots Alliance was accelerated, with Walgreens supporting the roll-out of up to 700 primary care clinics, up from the previously agreed 500 clinics.
- Kinnevik also invested in two new food companies, HungryPanda, a global leader in online Asian food delivery, and Simple Feast, a leading plant-based meal kit provider.
- The emerging markets and travel businesses continued to be negatively impacted by Covid-19
- Total shareholder returns: One year TSR 85%, five years 22%
- Market cap: SEK 111.7 bn
- Ticker: KINV-B.ST
- Share price 428 SEK // 52 week range 157-447, share price 5 years ago 219 SEK
- NAV is around 402 SEK
- Website : https://www.kinnevik.com/investors
- 4th quarter change in NAV QonQ +4%
- Kinnevik’s shareholders include Sweden’s wealthy Stenbeck family
19% TMT, Consumer services 57%, Healthcare Services 20% / 25+ businesses
Main portfolio holdings:
Tele 2 18%
Global Fashion 7%
Village MD 4%
Babylon Health 2%
Other investments of note: “Substantial increase in the assessed fair value of its 11% stake in U.S.-based Cedar. The Swedish company, whose stake in Cedar had been valued at 572 million crowns ($66.75 million) in its year-end release 2020, said new developments were pointing to a value uplift well over 1.5 billion crowns, or 5.5 crowns per Kinnevik share.”
Other startups in the portfolio include last-mile delivery company Budbee and online grocery retailer Kolonial.
On Zalando – Kinnevik plans to redistribute its €5.5 billion stake in online fashion retailer Zalando to its shareholders. Kinnevik owns a 21% stake in Zalando, which it first backed in 2010. Kinnevik retained a 31.6% holding in the company after it went public in 2014 but has since reduced its stake. Zalando’s stock price is $101 and market cap $25bn. Based on the closing price of Zalando’s shares on 15 February 2021, the intended distribution corresponds to a transfer of approximately SEK 55.1bn to Kinnevik’s shareholders, equivalent to approximately SEK 200 or 0.195 Zalando shares per Kinnevik share. Zalando reported exceptionally strong and profitable growth in Q3 and acquired more than one million new customers during Cyber Week.
That last redistribution is especially noteworthy. I have no views on Zalando but post the transaction, with the e-commerce business out of the frame, we have a more diversified, more speculative portfolio – with less direct exposure to Zalando’s share price. The investment company effectively shrinks by half and Nordic telecom giant Tele2 ends up being the biggest shareholding closely followed by Teladoc.