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Anchora Rides Nordic Tech Wave as Europe Steps Up

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In a rare reversal of recent trends, European equities outpaced their U.S. peers in the first quarter of the year, offering high-conviction investors a timely opportunity to shine. Anchora Capital, a concentrated alternative fund focused on listed Nordic small-cap tech companies, capitalized on this shift with a return of 7.8 percent in the first quarter, followed by an additional 7 percent gain so far in April. Amid a volatile market backdrop shaped by the “Liberation Day” tariffs and shifting global trade dynamics, one trait that has emerged as particularly valuable for long-only strategies like Anchora’s is concentration.

“Our largest positions have delivered the strongest performances in the portfolio, demonstrating that concentration has indeed played a positive role in our results,” says Jakob Greger Gravdal, co-founder and portfolio manager at Anchora Capital. The fund focuses on Nordic technology-enabled companies, building its portfolio around 8 to 12 core holdings that make up roughly 80 percent of assets, complemented by 10 to 12 smaller positions accounting for the remaining 20 percent.

“Our largest positions have delivered the strongest performances in the portfolio, demonstrating that concentration has indeed played a positive role in our results.”

Gravdal and co-portfolio manager Arne Simensen – drawing on their shared experience at Verdane Capital – focus on identifying high-quality tech companies “with clear paths to value creation through superior products and market positions.” Since the fund’s launch in the summer of 2024, the Nordic tech sector has largely mirrored the broader market. However, the duo is now observing early signs of divergence within the space. “The sector is not experiencing broad outperformance,” notes Simensen. “Instead, there’s a bifurcation emerging, where companies with strong business models, sustainable growth, and operational excellence are beginning to separate from the pack.”

“There’s a bifurcation emerging, where companies with strong business models, sustainable growth, and operational excellence are beginning to separate from the pack.”

The current market environment, defined by higher interest rates and ongoing economic uncertainty, has created particularly attractive entry points for small-cap Nordic tech companies, according to Simensen. “Many of these businesses have been overlooked despite strong fundamentals and growth prospects.” The so-called “Liberation Day,” when the new U.S. administration imposed sweeping tariffs on much of the world, has further pushed investors to look more closely at European opportunities. “We’re now seeing European customers actively seeking local alternatives to U.S. technology providers,” Gravdal adds. “This shift is improving the competitive landscape for our companies, many of which offer superior products but lack the brand recognition of established U.S. players. European customers are increasingly willing to evaluate alternatives to these more established providers.”

Historically, Europe has been more of a consumer than a producer of technology, but that dynamic is beginning to shift, says Simensen. “The push for Europeans buying from Europeans, coupled with regulatory changes and increased government spending, has the potential to unleash innovation in Europe not seen in generations,” he argues. Regardless of broader macro trends, Simensen views the Nordic region as “an extremely fertile ground for finding undervalued tech companies with genuine global potential – many of which are insulated from direct exposure to U.S. trade tensions.” In fact, less than 2.5 percent of Anchora Capital’s portfolio revenues stem from goods exported to the U.S., with most portfolio companies rooted in Europe and often competing head-to-head with larger American players.

“The push for Europeans buying from Europeans, coupled with regulatory changes and increased government spending, has the potential to unleash innovation in Europe not seen in generations.”

America’s innovation engine has long been fueled by a relatively small group – around three million entrepreneurs and innovators – clustered in tech hubs like San Francisco, Austin, Miami, and New York, notes Gravdal. “It takes six hours to fly from San Francisco to New York,” he points out. “In that same timeframe, you can travel from Stockholm to virtually any part of Europe, with the key Northern European markets even more closely knit together.” With a population of 500 million and increasing cross-border collaboration, Gravdal believes Europe is well-positioned to build an innovation ecosystem on par with that of the U.S. – “with the Nordics playing a particularly important role.”

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Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

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