Stockholm (HedgeNordic) – Christoffer Ahnemark joined small- and mid-cap-focused asset manager Origo Fonder in the summer of 2021, after years of researching and writing about Nordic small- and micro-cap stocks for the Aktiespararen magazine of the Swedish Shareholders’ Association. The experience and ability to peel down and strip away all unnecessary financial jargon and details to truly understand a business and create a succinct investment case are now helping Ahnemark run Origo Fonder’s recently-launched long-only fund Origo Seleqt.
“At my previous position, I had to compress extensive equity research to fit a magazine article,” recalls Ahnemark. With Aktiespararen’s audience focusing on Swedish retail investors, Ahnemark had to avoid financial jargon and complexity to make the story simpler and digestible for the broader audience. “Analyzing and writing about a business was like peeling down an onion, where I had to uncover the core elements of the investment case, the nuances and risks that mattered.”
“Analyzing and writing about a business was like peeling down an onion, where I had to uncover the core elements of the investment case, the nuances and risks that mattered.”
Ahnemark’s focus on micro-caps also made him appreciate the importance of having the right management team and people in place, especially in smaller businesses. “Investing in micro-caps is a lot about investing in people,” says Ahnemark. “It is very important, especially on the micro-cap side, to have an opinion and understanding of the people behind a firm, their incentives, ownership and ambitions.” This focus on people is also reflected in Origo Fonder’s approach of investing in Nordic small-caps in a phase of change. At the end of the day, running a business, executing strategy and driving change is the people business.
EMBRACING THE ORIGO MODEL
Upon joining Origo Fonder more than a year ago, Christoffer Ahnemark had to embrace the Origo Model shaped up by founder and CIO Stefan Roos. “The Origo Model is like a structural framework that helps us understand a firm’s journey of change and transformation,” explains Ahnemark. Relying on this framework, Ahnemark and Roos seek to capture value creation among misunderstood and under-the-radar small and micro businesses in the Nordic region. “We like to invest in quality companies that can evolve from good to great. True potential can sometimes be achieved through a new strategy, management team or even a divestment of a business unit.” That is the kind of transformation the Origo team seeks to identify and capture.
“We like to invest in quality companies that can evolve from good to great.”
Origo Fonder has been employing this framework to run long/short equity fund Origo Quest since its launch in early 2013. Since late March this year, Origo Fonder is also running micro-cap-focused Origo Seleqt based on the same framework. With Christoffer Ahnemark joining Origo Fonder and the subsequent launch of long-only and daily traded fund Origo Seleqt, the Stockholm-based asset manager has both broadened its investment scope and expanded its investor audience.
“Origo has traditionally demonstrated a certain Swedish bias and has been tilted towards mid-caps, while my focus has been on the broader Nordic universe, particularly Danish and Finnish small- and micro-caps,” explains Ahnemark. With the launch of Origo Seleqt, Origo Fonder has broadened its investment universe both across geographies and size segments. “We want to position ourselves as the premier boutique for Nordic small caps, and the launch of Origo Seleqt is helping us in achieving that objective.”
“We want to position ourselves as the premier boutique for Nordic small caps, and the launch of Origo Seleqt is helping us in achieving that objective.”
Despite Stefan Roos being responsible for running Origo Quest and Ahnemark focusing on managing Origo Seleqt, the duo is working shoulder-to-shoulder on a daily basis to run both funds. “We are a very small team, so we work closely together,” says Ahnemark. “We must do, because we spend a lot of time together, having discussions around different investment cases and meeting companies,” he continues. Roos and Ahnemark, however, divide their responsibilities across the funds to take advantage of their expertise, experience and competitive edges.
“As a small-cap enthusiast, it is natural for me to assess potential and find attractive opportunities on the long side,” explains Ahnemark. After years of running long/short equity strategy, Stefan Roos is very good on identifying alpha shorts. “In addition to his expertise in finding attractively-valued transformation cases in the small- and mid-cap space, Stefan is great at identifying weak companies that can become high-potential short ideas,” says Ahnemark.
“With both Origo Quest and Seleqt, we want to invest in well-run firms that have one ingredient or two to take them from one level to a whole new level.”
“With both Origo Quest and Seleqt, we want to invest in well-run firms that have one ingredient or two to take them from one level to a whole new level,” reiterates Ahnemark. “Because change often takes time, it is important to have both the patience and long-term commitment to capture long-term value creation,” he emphasizes. With Origo Quest approaching its tenth anniversary, Roos and the Origo team are showing that they have what it takes to embrace a long-term investing approach that can deliver returns for investors. “The fact that Origo Quest is in its tenth year, which is quite rare in the industry, represents a quality sign for the Origo approach to investing.”