wow what a what an exciting year and we are really pleased to uh tell you about the results uh for last year.

um it was a very uh strong uh year for the fund uh we were up uh 133%.

and so it's one of the very strong years and given the size uh of the fund in terms of absolute uh increase in value it was the largest on uh record.

yeah so that's the returns we also have had inflows last year uh albe it as not as much as in 22 and 23 still for more than 400 billion croners is the third highest inflow we ever seen into the fund.

and so if you put the different drivers together the returns of more than 2,500 billion the 400 billion plus in inflows and add to that the change in the croner value which makes the fund look bigger in croners the fund had a change in market value almost 4,000 billion chers the biggest ever M.

now we it doesn't always grow to to the top.

yeah no um we just want to uh warn again that uh this will uh not last forever.

we are today out with the stress tests and uh which are on our website we have different types of scenarios and we laid out the assumptions Behind these tests.

and we think in in several of the scenarios we'll have very very significant uh decline in the value of the fund.

yeah we also just want to remind everyone that you know a part of the returns that we collect is also actual uh cash returns dividends from our Equity Investments coupons on our bonds rents from our real estate Investments.

and so uh last year we had almost 400 billion croners cash return into the fund.

now whilst uh the absolute um return was strong the relative return uh was not uh we were 45 basis points behind uh the reference index which is the third uh worst year in uh in percentage terms.

um and if you look at where that comes from and we'll spend a bit of time on this Market exposure is where we are really index near in our um asset management and then you have security selection which is a stock picking those two kind of pretty much canceled out last year.

then we have two other elements uh totaling 45 basis points real assets is our real estate holdings and the way we report the relative result is that we report uh uh the value of the real estate relative to what we would have made if those if that uh value was invested in a combination of stocks and bonds.

um the value of uh real estate was roughly flat but since the stock market went up so much there is a negative result there of 25 basis points.

the 20 basis points on allocation uh consists of two things we had an underweight in equities and we also had an underweight in the uh in the largest tech companies in the US.

so that's uh the 45 basis points we have to look at uh the rity performance uh in the longer term uh time Horizon.

uh we've had some strong periods we've had a weak period now for two years but still since the Inception of the fund the access returns have been 25 basis points per year.

so different asset classes.

absolutely so the fund is invested in four asset classes as you see on this uh chart equities fixed income real estate and infrastructure for renewable energy.

and the return on each asset class you can also see with equities uh outperforming the other asset classes significantly 18% is a very very strong year.

so uh we'll go through each of these asset classes in turn and explain what the main drivers were.

equities first remind everyone this is uh the largest asset class More than 70% the starting point is 70% invested in equities and 20% return on that almost is is the biggest driver behind the the funds return this year.

and what you can see is also that this uh difference uh became much more apparent uh through the election and after the election this is still a long-term Trend that we've been seeing uh over the past 10 years.

we've seen the US Equity Market significantly outperforming the European market uh by magnitude of almost three times over the last 10 years.

now this is also of course driven by different sector composition in the different regions absolutely and we saw that uh last year as well.

technology uh really really strong of course driven by uh AI related stocks mainly also financials were very strong and it's a combination of interest rate Staying High high for longer and also a steepening of the curb.

since a lot of banks finance themselves in the short end and lend in the long run that's a very profitable uh positioning to have.

if you look at then the impact on the sectors uh uh massive gains from technology more than 1,000 billion Corner uh just incredible returns.

um on a stock specific basis you see Nvidia uh being the biggest gainer for us uh it became the largest company in the world uh last year uh followed by big returns from Apple and uh the other uh super scalers and technology companies.

a lot of these companies are tied into the same value chain so Nvidia designs the chips it's being produced in Taiwan it's being sold to the large large tech companies.

and you see it on a day like Monday earlier this week what the impact can be when uh when you have a a correction which is related to this uh value chain.

um now many of these companies are now bigger than countries they are so let's put it into perspective.

this is our portfolio single name companies the biggest ones compared to our combined investments in selected countries and what you can see is you know the likes of Apple Microsoft Nvidia you know our Holdings in those companies are larger than our combined Holdings in for example Germany France or even India.

so these are massive companies which means that there is an increasing concentration risk in the equity markets and hence in our portfolio.

this graph shows you how how much that concentration for the top 10 Holdings has gone from uh roughly 8% back in 2017 and now is uh nearing 20% of our Equity portfolio in only 10 Holdings.

now part of the story behind this is of course the merger an acquisition that goes on on the exchange.

but there is also a long-term Trend that we have talked about previously where companies uh choose not to list themselves and stay private uh for longer.

so this shows you over the last well 20 years plus uh how the number of listed companies in the US has fallen from almost 7,000 to 4,500 and by the same time uh the privately owned companies has grown from 2,000 to almost uh 12,000 or more than 11,000.

so um this is uh this is absolutely significant and of course what we're talking about here is uh the technology sector n.

yeah absolutely um a lot of things been going on in the uh in the tech sector and to shed some light on this we have uh woken up our uh portfolio manager uh Doug shell.

um Doug uh you are live from New York what's the reason behind the strong performance here.

hi Nikolai well for the second year uh AI has been the main driver of tech performance uh but this time with much more dispersion and returns in the semiconductor sub sector.

uh in 2023 almost all the companies perform well while in the past year overall performance was great despite many of the semi names being flat to down.

returns were driven by only a few stocks such as Nvidia which on its own increased in value by something like 25 trillion croner not due to multiple expansion but due to extraordinary earnings growth there was as a result of huge AI chip demand.

AI also drove earnings for a number of other Mega cap tech stocks such as meta and Google you used AI chips to power really incredible advertising tools.

these AI tools are able to automate every part of an ad campaign from actually creating the ads to choosing uh who to show the ads to to decide where to place them whether that's on search or video or feed.

if you run a small business having an AI tool run your ad campaign uh while gener ating more sales for you at a lower cost as a game changer and one that drove strong sales for meta or Google.

and what do you see uh going forward here.

well investors do have high expectations for Mega cap tech stocks in 2025 which is definitely a less comfortable place to be.

in order to continue their success tech companies will have to continue to invent new products and services that their customers are willing to pay for.

if there's an area that could surprise in 2025 it could be AI in the physical world.

one example are robot taxis which became widely available in San Francisco and LA in 2024 but could be rolled out far more widely.

the transportation sector is an enormous industry so robot taxis represented huge opportunities for companies including Tesla Google and Amazon.

very good um big thank you um.

and um we are moving on to external managers you know we have roughly 5% of the fund which is outsourced to external man managers.

it's been a very very profitable uh part of the firm and we'll hear from um Isabel why uh this has been uh so strong.

you we need a bit of sound from you sorry about that.

yeah you're right.

so 2024 has been another successful year for our external fund managers who once again generated excess returns.

and this is thanks to our 14 locally based fund managers spread across 50 different cities all over the world.

and I do think that there are sever reasons as for why they keep on outperforming.

first of all through deep company analysis local expertise and extensive on the ground research capabilities they have been able to select the right Investments.

but also kind of being close to companies and their supply chains has kind of enabled them to generate exceptional returns by identifying Trends early and often before these opportunities become wildly recognized by the rest of the market.

what are some of the events you've seen on the last year.

well so there's a lot of exciting things happening but I do think that one of the markets that we are most excited about is India.

we now have a total of seven managers based locally here both in Mumbai and Delhi and they've been able to generate excess return in a very challenging Market.

they've steered cleared of these very expensive smaller companies that we saw a lot of in 2024 and rather focused on larger Quality Companies which has been very beneficial for our portfolio.

and I also think that India in general has shown quite impressive resilience and of course remarkable growth over the past 40 years.

and this is despite various political and economical challenges and looking ahead we do expect this growth to continue mainly driven by a young and growing Workforce.

but we also think that this growth could increase even further with government support and more infrastructure Investments.

so this is definitely a market that's been very exciting to follow for 2024 and we're just as excited for 2025.

very good thanks a lot um.

now uh TR fixed income fixed income uh the second biggest asset class um well almost 30% invested in fixed income globally.

uh the return was 1% uh the yield on the portfolio the running yield is 4% so that means that interest rates through the year actually increased and hence the bond prices fell.

the other feature of the market and here you can see the the most important interest rate in the world arguably uh the US Treasury 10 year uh was volatile that's the that's a key takeaway from 2024.

but to shed more light on that we want to have and bring in Maly nberg uh.

so she's in New York now she's in the leader group we're a global organization and we have a permanent Pres sorry a PE person from The Leader group also in in New York and that's a good thing.

uh so Molin good to see you um what can you say about what's your impression of the fixed inco markets last year.

hi John so I would say that 2024 was a surprising year for bonds.

so going into the year most Market participants were expecting inflation to finally be under control rate cuts from central banks and predicting this would be a great year for bonds.

however most Government Bond markets ended up with flat or negative returns and for the fourth year in a row bonds actually had worse performance and stocks.

and this is despite both the Federal Reserve in the US and ECB in Europe cutting rates significantly last year and most of the other Global central banks also cut rates with the one outlier being Bank of Japan who hiked rates for the first time since 2007.

and what's interesting here and just to take the us as an example is that despite the FED cutting rates 100 basis points this fall 10year yields were actually significantly higher at the end of the year.

and that's not something that we normally see in the cutting cycle so the central bank is lowering rates the longer rates are going higher that's very unusual.

so how how how do you explain that.

M so it's there can be multiple reasons for why this is happening.

so to name a few is that inflation has been more sticky than expected and growth has been pretty resilient so that might impact stability for further rate Cuts.

another reason could be higher government spending and higher deficits which increases the supplier Bonds in the market and leading to investors requiring a higher compensation to hold these bonds.

so I think both of those themes are going to be really interesting to watch into 2025.

okay great thanks looking forward to that.

so we go to Real Estate uh so we have a combined real estate portfolio meaning that we invest both in listed and unlisted real estate.

uh so the unlisted part had a negative return almost flat but negative of 1%.

the listed uh performed pretty well at 10%.

so the combined portfolio these are almost 50/50 uh is awaited uh 5% uh for the portfolio as a total.

now uh real estate has had a difficult period um.

this chart shows are unlisted real estate holdings and the accumulated Capital return so we're not counting you know the running return because that comes in addition but just the capitalization of our investments.

and you can see that it peaked out uh in 2022 and has fallen quite sharply albe it maybe we see some signs of uh a kind of a stabilization of those returns.

but to get more light on that we turn to uh John McCarthy uh head of our us Investments on real estate side.

hi John good to see you.

thank you Trant uh good to see you as well and good morning everyone.

share our your perspective on what's going on in the US real estate market.

absolutely and and thank you for for letting me update you and and everyone on mb's real estate business.

um Pond as you said 2024 marked a turning point for most real estate markets after two challenging years where property values went down especially for Office Buildings we started seeing some good news in the second half of the year that suggest things are beginning to stabilize.

while there's still some uncertainty about interest rates and inflation uh we became more optimistic late in 2024 and we got a clear picture on where the economy is headed.

looking at the US specifically uh people working from home continued to affect how Office Buildings are doing uh but we saw progress in 2024 as more people gradually return to offices.

the best Office Buildings in good locations are doing better than others and we think this will continue as companies figure out their long-term plans for how they want their employees to work.

logistic Logistics properties uh meaning warehouses and shipping facilities are still doing very well helped by online shopping and companies changing how they move and store Goods.

we remain confident in this segment of the real estate market.

our investments in publicly traded real estate companies continue to recover in 2024 after losing a lot of value in 2022.

uh the portfolio benefited from exposure to Data Centers and senior housing which stayed in high demand throughout the year.

while some uncertainties remain about the economy uh we're carefully starting to invest more in real estate again.

we're focused on high quality quality Office Buildings warehouses and Retail properties that are now selling for lower prices.

we have recently invested about4 billion into real estate that aligns with our strategy.

for example uh we recently increased our ownership in eight Office Buildings in Boston San Francisco and Washington DC giving us full control of these properties.

while many investors are staying away from Office Buildings we saw this as a good opportunity to buy high quality buildings at attractive prices.

We Believe will benefit from buying properties now while other large investors are less able to do so.

so to sum up while the real estate market still faces challenges TR 20124 gave us reason to be cautiously optimistic.

that's good to hear thanks uh thanks a lot.

Sean last um as a class we have is renewable infrastructure uh.

and um the headline number uh is negative 10%.

now it's kind of a a bit of a a complicated number because the way we get to the valuation of these assets is to look at uh the long-term projections for power prices and also discount uh the revenue streams back to today.

so it's a function of forward pricing uh on the electricity side and interest rates that what explains uh the negative number.

but we have um haral here to shed some light on it.

haral uh what are you saying.

yes hello Nicolai.

yeah as we see uh uh from the Green Line in the graph on the left which is is our custom Renewables index large cap renewable stocks have had a difficult year in 2024 both in absolute terms and even worse relative to the General stock market shown by the black line in the left graph.

this is representative of the General market sentiment around renewable infrastructure globally in 2024.

despite what we see in the graph on the right namely that Renewables had another record volume growth year in 2024 for the first time surpassing 600 gaw of new renewable production capacity installed.

the negative developments in both public and partly also private valuations are mainly caused by a rising interest rate environment as you said but also a failure by the industry to deliver on even higher growth expectations and also stronger Focus from customers on security of Basel load supply.

for us actually this is good news uh as we have deliberately kept most of our powder dry.

we've deployed less than 10% of our Renewables infrastructure mandate so far.

we now see opportunities to enter into the ownership of more favorably priced uh renewable Assets in the coming years.

very good thank you so much that wraps it up.

yeah so key points just to reiterate 133% returns uh on the fund a strong year uh that means more than 2,500 billion croners.

we did uh underperform the broader Market by 20 sorry 45 basis points and the fund value stood at almost 20,000 billion at year end.

um also uh today or actually the one to the left we published yesterday is our Holdings list uh we now report this twice a year so you get it at the Folia stage uh now and you also get it at the half year stage.

so uh as you know we spend a lot of time and effort on being the most transparent Fund in the world and I don't think anybody else is is even close when it comes to this.

we are also today publishing uh an update on our strategy we have a threeyear strategy period we uh had an update where are we after year one we did that last year this year where are we after year two uh so that's also out there and you can see exactly what we have been working on.

and then lastly the stress test which we showed you earlier today that's also on the web so you can uh have a look if you want.

also to remind you that you need to block out uh 29th of April this is being streamed from lunch and onwards.

we have some uh phenomenal uh speakers and uh what we will talk about is what makes a great company so it should be relevant for investors uh for you guys for everybody who runs a company.

and we think it should be uh very very interesting combination of Business Leaders academics uh and investors so please uh note that date.