During this period, we witnessed an encouraging change in the market. The news flow remained lively with third-quarter reports. The difference from earlier in the fall lay in how they, alongside other news, were received. Particularly during September and October, good reports were met with a yawn and weaker reports were severely punished. In November, we essentially saw a reversal, where the market received news in a much more forgiving or appreciative manner.

The underlying theme in stock market sentiment is still largely influenced by inflation and interest rate markets. With each passing month, we are moving closer to a peak in both inflation and interest rates—a process towards normalization. Fundamentally, it matters little to the companies in the portfolios whether the interest rate is zero or five percent. Most of these companies have a strong net cash position and experience stable, structural growth that is less affected by economic fluctuations. Any day of the week, we would rather discuss the companies' innovative business models, their impressive growth, and robust profitability. Even though the dynamics of the interest rate market are an important factor for the value development in our funds, we view with optimism the solid foundations of our companies and their ability to create long-term value, regardless of the interest rate situation.

The US dollar (USD) functions as an important indicator of global sentiment, according to the theory of the 'least dirty shirt'. This means that 'the USA has many problems, but the rest of the world has much worse problems' and the USD is the world's reserve currency. Thus, a strong dollar is an expression of nervousness and decreased risk appetite. The weakness we have seen in the USD against other currencies during this period is a clear component in the change of scene. Interestingly, the weaker dollar further strengthens the momentum in Nordic stocks, something that could potentially attract increased attention from American investors. As marginal price setters, these have a significant impact on flows in and out of our domestic markets. Everything has the potential to occur simultaneously – the negative reflexive spiral we've seen for two years can quickly be replaced by something similar upward. Admittedly more pleasant, but just as difficult to navigate for a valuation-oriented long-term investor.

The paradox of a strong dollar in recent years, which has contributed to revenue and profit growth in many Nordic companies, accompanied by price declines in the same companies, has not escaped us. As we have repeated several times, we would have preferred that more companies had been clearer about what currency effects have meant for profit growth in recent years. The results for the fourth quarter will be a first test of what the income statements will look like without this contribution.

One factor that could further strengthen sentiment is corporate acquisitions. Assets that become 'too cheap' attract the interest of industrial and financial buyers. These operate outside the stock market and are less affected by daily volatility. Since 2015, Private Equity as an asset class has reportedly increased its capital by 2.5x. Much of this dry powder is still unused. Hungry wolves are currently circling around software companies left to wither in the stock market's wilderness. We also note that innovative companies, especially within business-critical software, are changing hands in the private market at valuations that are often significantly higher than those we see on the stock market.

Adevinta, a holding in both TIN New Technology and TIN World Tech, is a current example of increased interest in attractive assets. Permira and Blackstone have now made their 'final' bid for the company, where existing major owners eBay and Schibsted will roll over part of their ownership into a private structure. Let's start by stating that the holding will be a good deal for the shareholders.

With the scandalously poor outcome for minority shareholders in the bid for Meltwater fresh in mind, the dual structure of the bid for Adevinta was the biggest risk factor in the deal. The asymmetry in which some owners, unconcerned by rules applicable to, for example, equity funds, can take a longer perspective creates a conflict of interest. In the case of Adevinta, this is somewhat mitigated by Schibsted selling 60 percent of its holding for cash payment. This suggests some form of intelligent price discovery or reconciliation between private and public environments.

Finally, a few words about corporate governance. Adevinta's board consists of 11(!) members, only five of whom are independent of the major existing owners Schibsted, eBay, and Permira. These five have agreed that they cannot give any recommendation to the owners whether to accept the bid or not, obviously influenced by the dual structure. Sure, the cash offer is seen as 'fair' given the premium offered compared to other transactions in Norway. At the same time, it is argued that the company over time can generate value exceeding the bid. The whole story reinforces our thesis that corporate governance must remain a central part in the evaluation of all investments.

TIN New Technology
Last month, the share value increased by 8.1 percent. During the same period, the value development for the broader comparison index for Nordic small companies, VINCSCN, was +6.5 percent. Over the past 12 months, the fund has decreased by 4.4 percent, compared to +1.3 percent for the index. Since the fund's inception on February 4, 2019, the fund has risen by 37.4 percent, while the index has increased by 52.0 percent. The three largest holdings in the fund at the end of the month were Evolution, Novo Nordisk, and Surgical Science. For a list of the top ten holdings, see tinfonder.se/holdings-tnt/.

The holdings that contributed most to the return during the month are Surgical Science, Evolution, and Embracer. Among the holdings that negatively affected performance during the month, we find Frontier Development, Xero, and Veeva. The fund's largest segment is Software, which accounts for 33 percent of managed capital, followed by Health at 32 percent and Digital Brands at 20 percent.

TIN World Tech
Last month, the share value increased by 4.5 percent. During the same period, the value development for the broader comparison index MSCI World was +2.9 percent. Over the past 12 months, the fund has increased by 10.2 percent, compared to +12.4 percent for the index. Since the fund's inception on June 12, 2020, the fund has risen by 20.4 percent, while the index has increased by 65.9 percent. The three largest holdings in the fund at the end of the month were Microsoft, Salesforce, and Adobe. For a list of the top ten holdings, see tinfonder.se/holdings-twt/.

The holdings that contributed most to the return during the month were Salesforce, Take Two Interactive, and Adobe. Among the holdings that negatively affected performance, we find Xero, Teamviewer, and Veeva. The fund's largest segment is Software, which accounts for 54 percent of managed capital, followed by Health at 21 percent and Digital Brands at 14 percent.