Protean Funds Scandinavia AB March 2026 Associate Letter

Expensive Companions,

Protean Small Cap declined by -0.9% in March. The benchmark index declined -3.1%. Since launching in June 2023, the fund has gained 55.6%. The Carnegie Nordic Small Cap Index is up 22.1% in the identical interval.

The hedge fund Protean Choose returned 0.5% in March.

Protean Aktiesparfond Norden returned -2.8%. The benchmark was down by -2.6%. Since inception, twelve months in the past, the fund is up 18.3%, and in the identical interval the VINX Nordic Cap index is up 12.8%. The fund now manages 1.7bn SEK.

All figures are internet of charges.

This month’s letter elaborates on Aktiesparfonden’s encouraging first 12 months, the Fog of Struggle that plagued markets in March, why we stay cautious however not as cautious as mid-March and why we have been unusually energetic. Plus, as all the time, commentary on the month’s numerous winners and losers.

Thanks for being an investor!

// Group Protean

Nowhere to cover

March 2026 • Written by Pontus Dackmo

Would not it have been handy to write down this month’s missive about one thing utterly completely different? An organization deep-dive, a mirrored image on Nordic small cap valuations, maybe an commentary in regards to the underappreciated capital cycle in some obscure industrial area of interest. We might have most popular that. You’d most likely have most popular that too.

The intuition, as a Nordic-focused fund supervisor, is to deal with geopolitical occasions as background noise. We do not commerce oil futures, we do not run a macro fund, and we definitely do not have an edge on the intentions of the Iranian Revolutionary Guard or US Commander in Chief. It could be comfy to dismiss the Center East disaster as another person’s downside and retreat to the acquainted terrain of Nordic firm fundamentals.

The issue is: there is no such thing as a such retreat. An inconvenient reality in regards to the Nordic fairness markets is that the majority of our listed firms have worldwide operations and are deeply embedded in world provide chains. A Swedish industrial firm would possibly report in kronor, maintain its AGM in Stockholm, and have a totally Nordic board – however its enter prices are denominated in {dollars}, its prospects are in Germany and China, and its order ebook is a perform of worldwide capex cycles. An vitality shock within the Strait of Hormuz does not cease on the Persian Gulf. It travels by Brent crude, by European fuel costs, by the entrance finish of price curves, by the krona, by sentiment, and ultimately lands on the desk of a CFO in a mid-sized Swedish city, questioning whether or not to revise steering.

There may be nowhere to cover from a bodily provide shock. Not in Scandinavia, not in small caps, not in “high quality compounders”.

The fog

Common Carl von Clausewitz coined the time period “fog of conflict” nearly two centuries in the past. Within the chaos of battle, the data accessible to decision-makers is incomplete, contradictory, and sometimes intentionally

deceptive. The rational response, he argued, is to not search certainty, however to make choices strong sufficient to outlive being incorrect.

March supplied a masterclass in fashionable fog of conflict, besides now the fog is generated not by cannon smoke however by tweets and nonsense.

We’ve no edge in forecasting the end result of the Center East battle. None. We have no idea whether or not the Strait of Hormuz will reopen subsequent week or stay contested for months. We have no idea if escalation results in a floor operation or if a face-saving deal materializes over Easter. And critically, we do not suppose anybody else is aware of both – no matter how confidently they narrate it. What we will management is how we place for the vary of outcomes.

Energetic Portfolio Administration

March was, in all probability, probably the most energetic month we have now had in a protracted whereas. Probably ever.

That warrants some rationalization. We don’t have a good time turnover. Buying and selling is, at its core, a mandatory evil since each ticket is linked to a fee value borne by the fund, each unfold has two sides. We’re absolutely conscious that exercise for exercise’s sake is a dependable technique to erode returns while simply producing a sense of being busy.

What occurred in March is that costs moved, every day, in ways in which had little or no to do with firm fundamentals. Tariff bulletins, reversals, threats, walk-backs – the signal-to-noise ratio collapsed. When the market reprices a enterprise by 10% as a result of a politician mentioned one thing on a Sunday, after which reprices it again 8% two days later, the query we ask ourselves will not be “ought to we commerce?” however “can we afford to not?” The disconnect between worth and worth was, on sure days, huge sufficient to drive a truck by.

So we traded. We trimmed issues that moved too far. We added to issues that bought dragged down indiscriminately.

We don’t fetishize this. The aim isn’t to be energetic. It’s to personal companies at costs that make sense. Some months which means sitting on our fingers. March was not that month. When the market fingers you volatility as a present, and the underlying thesis hasn’t modified, the proper response is to make use of it.

The trustworthy addendum: a good few trades in March have been incorrect. Some we have been too early on; some we should not have touched in any respect. Elevated exercise is a double-edged sword: extra alternatives to revenue, but in addition extra probabilities being incorrect.

What we’re watching

The trustworthy reply is: we’re watching the identical factor as everybody else. The Center East. The Strait of Hormuz. The oil worth. However we’re additionally waiting for the second-order results that are inclined to arrive with a lag and matter greater than the headlines.

Extra speculatively: we’re waiting for the second when the market shifts from treating this as a binary occasion (resolved / not resolved) to treating it as a brand new baseline. That shift, when it occurs, tends to be the place alternative is best. As a result of as soon as the query modifications from “will issues return to regular?” to “what does the brand new regular appear to be?”, the reply requires elementary evaluation somewhat than geopolitical punditry.

However you do not all the time want to attend for the fog to carry. Some conclusions are strong no matter how the binary query resolves. This is an instance from our personal course of.

In the course of March, we purchased a significant quantity of Nibe (NDYLF). The thesis will not be that the conflict ends tomorrow, nor that it drags on for months. The thesis is that no matter end result, this disaster will put vitality effectivity and lowered oil dependence again on the political agenda throughout Europe – forcefully, and doubtless durably. It occurred after the 2022 Ukraine shock, when warmth pump gross sales exploded and vitality renovation turned a political precedence. That impulse then pale as fuel costs normalised and populist backlash pushed governments to melt their local weather ambitions. Properly, right here we’re once more. Besides this time, the lesson needs to be tougher to overlook: Europe’s vitality dependence will not be a theoretical danger mentioned at suppose tanks. It is a bodily vulnerability that disrupts economies when issues go incorrect in locations we won’t management.

Nibe is the dominant European producer of warmth pumps. The inventory has been within the penalty field for 2 years – stock destocking, normalising demand, rising competitors, a weak Swedish housing market. It is down 70% from its peak. We expect the market is pricing a completely impaired enterprise, whereas the structural case for energy-efficient heating has simply been handed one other highly effective catalyst.

That is the type of evaluation we choose: not “will there be a ceasefire by April sixth?” however “what is probably going true in regards to the world on the opposite facet of this, it doesn’t matter what?” One of the best investments have a tendency to return from conclusions that do not depend upon the not possible job of predicting the unpredictable.

Aktiesparfond Norden – One 12 months In

March thirty first marked one 12 months since launch. The fund has returned +18.3% in opposition to the VBCSKN index’s +12.8%. That’s an outperformance of 5.5%.

Twelve months will not be a monitor report. It is a begin. A greater begin than a foul begin, which is all we’ll declare.

The extra instructive quantity is the 1.7bn SEK in property attracted. To grasp why that issues, you must bear in mind the issue we got down to remedy.

The energetic fund administration business has a well-documented flaw: just about all critical analysis exhibits that actively managed funds underperform their benchmarks after charges. Not as a result of the underlying stock-picking is essentially unhealthy, however as a result of charges are too excessive, portfolios too bloated, and the inducement construction backwards. Fund firms optimize for asset gathering. Banks optimize for captive distribution. Neither optimizes for the particular person really making an attempt to compound their financial savings.

The plain counter is the index fund. Low-cost, clear, trustworthy. Besides it owns every thing indiscriminately – the frauds, the fads, the structurally declining companies – with no judgment or overlay.

Our argument has all the time been that there’s a hole between these two choices. A white area that no person has an incentive to fill: a low-fee, genuinely energetic, long-term oriented fund proudly owning respectable Nordic companies. Only a supervisor with pores and skin within the recreation, targeted on long-term money circulate technology, making choices with out anybody else’s approval required.

The Aktiesparfond was constructed on the premise {that a} long-term Nordic saver deserves entry to that type of impartial, genuinely energetic administration. At 0.5% per 12 months, with each day liquidity, alongside each costly energetic fund and index fund in existence.

That 1.7bn SEK after one 12 months suggests the hole was actual. Whether or not the efficiency holds is a separate query, the final one 12 months tells us nearly nothing with statistical significance. However the construction is working, the thesis is unbroken, and the alignment of pursuits stays the muse.

A Punch In The Mouth

The Prussian navy strategist Helmuth von Moltke was a recent of Clausewitz. He’s remembered for the commentary that no plan survives first contact with the enemy (a model of which Mike Tyson famously transformed to “Everybody has a plan till they get punched within the mouth.”). The funding equal is that no portfolio survives first contact with a real-world shock.

We got here into 2026 positioned for a world of financial tailwinds, deregulation, and an enhancing European outlook. That world has been interrupted – maybe briefly, maybe not.

Months like March are uncomfortable. They’re alleged to be. Consolation is never the place returns are discovered. We remind ourselves – and also you – that our course of is designed to compound over years, not months. The secret’s to remain within the recreation, keep away from massive draw-downs, endure intelligently when struggling is unavoidable, and be able to act when the fog lifts.

Thanks for being an investor.

// Group Protean

Protean Choose

March 2026 • Written by Pontus Dackmo

Protean Choose returned +0.5% in March. After two softer months to begin the 12 months, this can be a welcome end result, and extra importantly, it’s the type of month that offers the technique its motive for current.

Nordic indices have been down between 5 and 10% this month, relying on which one you choose. We ran a mean internet publicity of round 20%. The fund made a small optimistic return. That’s roughly what we designed this factor to do.

We’re not a market-neutral fund. Or a short-biased fund. We’re a fund that believes, with some conviction, that issues typically need to work out in the long run, and that almost all of long-term returns are made by proudly owning companies, not by being overly intelligent about when to be brief them. That perception is why we nearly all the time maintain a optimistic internet publicity, even in troublesome circumstances. The shorts are there not simply to earn a living in isolation, however to behave as an airbag: you do not drive with an airbag hoping it deploys, however you are grateful it is there when it does. Like this month.

Largest contributors have been the OMX future brief place (plus put-spread), Rusta lengthy, NIBE lengthy and Electrolux (ELUXY) brief, in that order.

Largest detractors have been Devyser , Lundin Mining (LUNMF) (though offset by a brief in Boliden (BDNNY)), Volvo (VLVLY) and Getinge (GNGBY) lengthy positions.

We enter April at 19% internet publicity. Gross is now at 117%, having nudged it upward from extra cautious ranges, shifting progressively again towards our historic common of round 135%. It is a deliberate, incremental resolution, not a conviction name. The market feels non-linear proper now. If circumstances proceed to really feel constructive sufficient to justify further danger, we’ll add. If not, we can’t.

We mentioned going into the 12 months that we wished to earn the appropriate to take extra danger. March was a small step in that path. Let’s have a look at what April has to say about it.

Decreasing the capability restrict

We introduced throughout the month that we’re reducing the capability restrict for Protean Choose from SEK 2 billion to SEK 1 billion. The fund presently manages roughly SEK 970 million. We’re, in different phrases, very shut.

Some context. After we initially set the cap at SEK 2 billion, we assessed capability primarily based on the fund in isolation. That was cheap on the time. However circumstances have modified. We now handle institutional mandates alongside the fund, making use of the same funding technique in the identical universe of Nordic small- and midcap firms. Operating bigger combination capital by the identical alternative set degrades the issues that matter most: execution high quality, the flexibility to take significant positions in much less liquid names, and the velocity of decision-making that comes with being small. We might somewhat shut too early than too late.

Right here is the way it will work. As soon as we go SEK 1 billion, we’ll talk that the fund is closing. There’ll then be a ultimate subscription window of roughly one month. After that, the fund is closed to new capital. Withdrawals are all the time attainable – this solely impacts new deposits.

Readers of those letters will recognise the philosophy.

We’ve mentioned since day one which we optimise for efficiency, not for comfort, dimension, or advertising and marketing. We’ve written at size – maybe at tedious size – in regards to the perverse incentives in fund administration, how AUM-maximising behaviour dilutes returns, and the way dimension is likely one of the major methods efficiency dies. We’ve mentioned we might cap the fund early. We’ve mentioned we might sacrifice income for return high quality. And now, approaching the second the place these phrases develop into motion, it feels price pausing to acknowledge what this implies.

On a private degree, the prospect of really closing the fund is a supply of delight. Not as a result of turning away capital is intelligent enterprise – it clearly is not. However as a result of it means we’re doing what we mentioned we might do. After we began Protean, the motivation was to take a position our personal financial savings in an institutional setting, to not construct an asset gathering machine. Each structural alternative we have made has pointed on this path: the quarterly redemptions that scare off allocators, the scale cap that limits our price revenue, the excessive hurdle charges that make efficiency charges genuinely exhausting to earn. None of that is “The best way to Construct a Huge Worthwhile Fund Administration Enterprise”. If there have been a textbook on the topic, we would function as a cautionary story.

However here is the factor. Virtually 4 years in, the fund has delivered aggressive risk-adjusted returns. We even received an precise prize for it. Property have grown to the cap not by advertising and marketing campaigns, however by efficiency and phrase of mouth. Our traders embrace a number of the most subtle allocators we all know, alongside buddies, household, and our personal financial savings. That this motley crew has collectively introduced us to the purpose of closure looks like vindication of a philosophy.

We recognise this limits flexibility for each current and potential traders. That trade-off is deliberate. Defending the circumstances for good long-term returns is, in our view, an important factor we will do for the individuals who have already entrusted us with their capital.

Protean Small Cap

March 2026 • Written by Carl Gustafsson

Protean Small Cap returned -0.9% in March. Our benchmark CSRXN (SEK) was down -3.1% throughout the month. Therefore, the fund outperformed the index by 2.3%. Since inception in June 2023, the fund has outperformed the index by 33.5%. Complete efficiency since inception is 55.6% internet of charges.

The fund now manages c. SEK 990m following a continued influx of funds, thanks for believing in us.

March recap

High contributors have been Cint, Rusta, BTS, Smartoptics and Nibe. Notable detractors have been Devyser, Balder (BALDY), Arctic Falls, Nyfosa and ITAB.

Cint reported a substantial sequential enchancment in gross sales throughout the fourth quarter and we elevated our stake within the firm on the day of the report in February. Since then, the share has continued to climb and it turned our largest contributor in March. It is not a inventory for widows and orphans however we imagine the market is underestimating the expansion alternative inside the enterprise space Media Measurement. We acknowledge a string of operational points, in addition to in regards to the impression of AI available on the market analysis sector, however Q3 was possible the trough by way of ache. The valuation could be very interesting.

Rusta reported a really sturdy quarter, the place the advantages of the stronger SEK began to have an effect. Wholesome LFL, in addition to a firmer outlook for retailer openings, result in share to realize in an in any other case gloomy March for shopper publicity.

On the detractor facet, Devyser continued its stoop, with the share down by a 3rd 12 months thus far. As we write this, the share now trades beneath its IPO worth from 2021, regardless of clearly approaching cash-flow break-even and powerful progress prospects in a number of areas. Devyser is energetic inside genetic testing the place DNA is used to evaluate illness danger in addition to detecting them. Introducing new testing protocols takes time, however they’re very sticky as soon as established. The market might need overestimated the velocity

Authentic Put up

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