Invalda INVL, one of the leading asset management groups in the Baltic region, had equity of EUR 76.2 million, or EUR 6.56 per share, at the end of March this year – both figures were 12.2% lower compared with the end of 2019.
After the first quarter of this year, the decision to pay Invalda INVL shareholders dividends of EUR 9.3 million, assigning a dividend per share of EUR 0.80, was made, decreasing the company’s equity correspondingly.
The notable decline of the global financial markets in the first quarter this year caused by the coronavirus pandemic had a significant effect on the value of investments. As a result, Invalda INVL’s net loss in the reporting period was EUR 10.6 million (in the same period last year the company earned a profit of EUR 3.7 million).
“The reduction in the value of investments is understandable given the current uncertain situation. It does not significantly impact the group’s operating activities and plans. Invalda INVL’s business model is sustainable and easily adaptable to the changing environment. Moreover, we do not have financial debt and we have also accumulated financial reserves that allow us to continue developing the asset management business and take advantage of the opportunities that arise in the market,” said Darius Šulnis, the President of Invalda INVL.
The drop in the market values also had a negative effect on the client assets under management of the group’s companies; in the first quarter of this year they suffered a loss of EUR 118 million while the total value of assets under management decreased to EUR 969 million.
Asset management business
Invalda INVL’s revenue from the asset management business in the first quarter of this year amounted to EUR 4 million and was 71.8% higher compared with the same period in 2019. The company’s earnings from the asset management business in the reporting period were EUR 0.4 million and increased by 98% compared with the first quarter of last year.
“After the final closing of the INVL Baltic Sea Growth Fund, the largest private equity investment fund in the Baltic region, in the first quarter this year, we continue to actively work with new investments to prudently employ the fund’s EUR 165 million of capital. The completed sale transaction by INVL Baltic Real Estate is also worth mentioning as it confirmed the success of the company’s strategy and permitted the dividend payment of EUR 20.4 million to its investors. Much attention is also given to the creation of INVL’s second, forests and agricultural land, fund,” Darius Šulnis said.
According to him, Invalda INVL’s main priority in the current period is to preserve the value of the assets entrusted to the group’s management and make new investments while taking advantage of the evolving environment and opportunities that arise.
Investments
At the end of the first quarter of this year, investments in products managed by the Invalda INVL group amounted to more than EUR 30 million while other historical investment holdings totalled at more than EUR 30 million as well. The reduction in the value of investments caused a loss of EUR 12.4 million during this period.
“The team’s long-term experience shows that historically strong companies ultimately recover irrespective of a temporary drop in value. We are not stressing the decline in value but rather focusing on making sure that the separate businesses adapt to the changing environment and are able to maintain their competitive advantages and profitability in the future,” Darius Šulnis said.
Invalda INVL, operating since 1991, is one of the leading asset management groups in the Baltic countries. The companies owned by the group in Lithuania and Latvia manage more than 20 mutual and pension funds (2nd and 3rd pillar), alternative investments, individual portfolios, private equity, and private debt financial instruments. At the end of the first quarter of 2020, the group’s companies had more than EUR 950 million of assets under management, entrusted to them by over 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.