Invalda INVL, one of the Baltic region’s leading asset management groups, had equity of EUR 65.5 million at the end of 2018, or EUR 5.67 per share (respectively 2.36% and 2.5% more than at the end of 2017). According to audited results published by the company, Invalda INVL’s profit for 2018 was EUR 0.34 million, or 97% less than in 2017.
“Profit in 2018 was the smallest in the last several years because markets were unfavourable for growth in the value of investments. We also invested significantly in the asset management business and in attracting new clients. We think the work that has been done and the investments that have been made will positively impact the group’s growth and results already in the coming years,” said Darius Šulnis, the president of Invalda INVL.
The group’s client assets under management at the end of 2018 totalled EUR 675 million, which is 10.4% more than a year earlier (EUR 611.5 million).
Asset management business
According to Darius Šulnis, the asset management business is strategic for Invalda INVL, and the priority is to ensure the successful management of entrusted assets.
“In many of the world’s financial markets, 2018 was the worst year since the last financial crisis. While most of INVL’s products were and are the best or among the best in the market and generate long-term returns for investors, in 2018 results were negative, and clients experienced a total loss of 21.9 million euros. We’re glad that in the first quarter of this year those results were essentially reversed,” Šulnis said.
Revenue from asset management grew 4.2% in 2018 to EUR 7.4 million, though due to rapid expansion, the overall result for the asset management business was a loss of EUR 0.7 million.
Work establishing the INVL Baltic Sea Growth Fund was done in 2018. On its first closing in February 2019, EUR 106 million was raised and the INVL Baltic Sea Growth Fund became the largest private equity investment fund in the Baltics. Great attention was also paid making retail services more user-friendly and accessible. Moreover, changes and investments were made related to the 2019 2nd pillar pension funds reform and the presentation of 3rd pillar pension fund opportunities.
“We can already see the positive effects of this work. We’re happy to be able to introduce new significant investment opportunities and to contribute financially and with our work to the growth of individual companies, the country and region,” Darius Šulnis said.
Investments
At the end of 2018, the fair value of the Invalda INVL group’s investments in investment products it manages was EUR 26.4 million. Of them, the most significant investments were in INVL Baltic Real Estate, the INVL Emerging Europe Bond Subfund, Moldova-Agroindbank, and INVL Technology.
“We hold the principle that Invalda INVL should invest free funds together with INVL clients. We think coinciding interests have a positive influence on stakeholders’ mutual trust and encourage long-term collaboration,” Darius Šulnis said.
In October 2018, Invalda INVL together with clients and the European Bank for Reconstruction and Development (EBRD) as well as the private equity manager Horizon Capital (Invalda INVL, Horizon Capital and the EBRD formed a consortium that acts via the UK-based company HEIM Partners) invested in Moldova’s largest commercial bank Moldova-Agroindbank.
Invalda INVL also has other historical investments, whose total value was EUR 30.5 million. The largest of them are the investments in Šiaulių Bankas and Litagra.
“Although there wasn’t significant growth in the value of our own assets last year, we worked actively with our holdings. Changes that were made are positively impacting the operations of the specific businesses and should increase those businesses’ value,” Darius Šulnis said.
Although Invalda INVL’s profit was the smallest in the last several years, he said, given the growing asset management business, positive changes at business holdings, and investments made, it can be said that the year was important and that the work done will positively influence the group’s growth and performance in the future.
The company’s published audited results are to be approved at the annual general meeting of shareholders. At the shareholders meeting, it will be proposed to increase the company’s share capital in order to realize stock options for group employees granted in 2016. Additionally, approval of the signing of options contracts with employees of group companies for results of 2018 will be proposed, as will the terms and conditions for signing the options contracts. And as in previous years, it is planned to propose permitting the company to buy back its own shares.
Invalda INVL, operating since 1991, is one of the leading asset management groups in the Baltic countries. The companies the group owns in Lithuania and Latvia manage more than 20 mutual and pension funds (2nd and 3rd pillar), alternative investments, individual portfolios, private equity, private debt and other financial instruments. The group’s companies have assets under management of more than EUR 675 million, entrusted to them by more than 200 000 clients in Lithuania and Latvia as well as international investors. The shares of Invalda INVL have traded on the Nasdaq Baltic securities exchange since 1995.