Asset management with a clear and consistent philosophy

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Diversification, returns and liquidity

Financial Investments provides a source of diversification and access to liquidity for Novo Holdings and the Novo Nordisk Foundation.

Our core business includes finding specialized niche portfolio managers, selecting direct investment ideas within equities, credits and alternatives, as well as managing our short-term bond portfolio.

We have a consistent track record of generating returns above relevant benchmarks.

Our investment principles

We are a value investor focused on underlying business fundamentals, managed in a shareholder friendly manner.

We have have a long-term investment horizon, and we often invest in businesses that are out of favour for reasons we consider temporary.

We endeavor to avoid permanent loss of capital by not paying too much for an asset and by understanding the fundamental risk of each asset. We believe in capitalizing on the cyclicality in valuations, earnings and credit spreads; opportunities arise due to human herd behaviour which creates cyclicality in financial markets.

We are cautious investors, and we try to only pay for expected outcomes and keep a margin of safety. In other words, we strive to leave room for upside potential. 

Partnerships

A portion of our portfolio is managed internally, and a portion is invested through external portfolio managers. We build long-term relationships with our external portfolio managers and are very careful in selecting the right team. In particular, we look for the following attributes in an external manager:

  • an understandable and well-defined strategy, used successfully over several cycles;
  • a fundamental and bottom-up investment approach;
  • an independent mind;
  • a long-term investment horizon;
  • a concentrated portfolio;
  • limited assets under management; and
  • strong alignment of interests due to of a high degree of co-investment by the manager.
Investing in a broad portfolio of equities and fixed income securities as well as alternative asset classes helps to balance the risk/return profile of the investment portfolio of the Novo Nordisk Foundation. Morten Beck Jørgensen, Managing Director, Financial Investments

Financial Investments

Our financial investments consist of a pool of well diversified, return-generating financial assets.

Equities

We have a global and active equity investment strategy and portfolio.

As of December 2017, 13 carefully selected specialized niche portfolio managers managed 75% of the equity portfolio in a mix of global, regional and country-specific mandates.

In addition to our active managers, we have 16% of the equity portfolio in index products and 9% in direct equity investments, with the Danish company FLSmidth being by far the largest direct investment.

Credits

Our credit portfolio is diversified across several types of underlying risk sources. These assets can be broadly classified into the following categories:

  • emerging market debt;
  • high-yielding debt issued by corporations;
  • senior secure loans issued by corporations;
  • commercial real estate debt; and
  • subordinated debt issued by financial institutions.

7 specialized credit managers manage 87% of the credit portfolio. The rest of the portfolio is managed in-house.

Bonds

Our bonds are managed in-house. Many of our bonds are covered bonds issued by Danish mortgage institutions.

The bond portfolio also comprises investments in high-grade corporate debt as well as the safest tranches of securitized pools of international corporate loans.

Our bond portfolio has high liquidity, low credit risk and low duration, which makes it less sensitive to changes in interest rates.

Alternative investments

We selectively invest in alternative assets such as real estate, private debt and private equity.

Our largest investment in this category is the Danish real estate company DADES.

  • 7.8 %

    average annual returns since 2005.

  • 380 M

    returns in 2016.

Meet our team

We are a small and agile team with significant experience in financial investments and portfolio management.

Our headquarters

The Financial Investments team is based at our headquarters in Copenhagen, Denmark.

Novo Holdings A/S
Tuborg Havnevej 19
2900 Hellerup
Denmark
+45 3527 6500

CVR# 24257630

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