Our strategy is intact, but we are increasingly moving towards direct ownership to realise it. We are becoming a pure Private Equity and Real Estate investor with a more unique and concentrated portfolio of holdings where we can, in a more direct way, contribute our expertise and create value.
Since 2012, East Capital Explorer has increasingly been focusing on Private Equity and Real Estate, i.e. unlisted assets. These types of assets are typically less affected by short-term market sentiment at the same time as our strong network in the region enables us to find interesting companies that are not available for all investors. We also have increased possibilities to reach controlling stakes, which gives us better possibilities to carry through our value-added investment management style, and ensures that we can drive the change and development in the companies.
Our preferred way of investing is today through direct investments. By owning the companies directly we have greater possibilities of working closely with the companies, thereby adding value, and also review every investment based on what it adds to East Capital Explorer’s portfolio. As a result, the concentration in the portfolio is increasing.This enables an increased transparency, where our shareholders can more easily get an understanding of the portfolio’s exposure and its performance drivers. Investments in East Capital’s alternative investment funds, which historically have been the primary way of achieving exposure, can still be done. However, these types of investments will be done selectively and only when we can see a clear benefit to do so.
The portfolio has changed significantly during the past years, reflecting the new way of realizing the strategy. In the end of 2012, only a minor part of the portfolio consisted of Private Equity and Real Estate. Today, these parts represent more than half of the portfolio (60 percent as of 31 December 2014). The transformation will continue, and in a couple of years’ time, we expect the portfolio to almost exclusively consist of Private Equity and Real Estate. We do, however, not rule out some listed assets. If we see clear opportunities in this asset class, we will continue to do our best to seize them for the benefit of our shareholders.