Investor AB Class A · OMXSTO:INVE_A
Investor AB Class A — Investor Day (December 2004)
16 slides from Investor AB Class A's investor day presentation, Dec 10, 2004
Slide 1: Investor's activities in Venture Capital and buyouts
Börje Ekholm Executive Vice President and Head of New Investments 2004-12-10 www.investorab.com Investor’s activities in Venture Capital and buyouts 1. The rationale for New Investments 2. Structure of New Investments 3. Being in the right markets 4. How we manage Venture Capital 5. Success and fail
Slide 2: The rationale for New Investments
The rationale for New Investments 1. High return potential 2. Diversification into SME and new technology 3. Enables Investor to identify trends early 4. A way of leveraging our network 5. Synergies with Core Holdings in due diligence processes and development of holdings 2004-12-10 www.investorab.c
Slide 3: Formation of New Investments
Formation of New Investments Investor Growth Capital Novare IT & Healthcare Kapital Expansion Stage Venture Capital Investor U.S., Asia & Northern Europe International Investor Capital Partners – Asia Fund LBOs in Greater China Sector-wide EQT EQT LBOs in Northern Europe Sector-wide 1994 1995 2000 2
Slide 4: Conservative valuation principles; Investor Growth Capital
Conservative valuation principles Valued at market price at end of quarter Listed applying a liquidity discount: holdings: – 20% if restricted or large share of trading volume, or – 10% if no restrictions and liquid Valued at the lower of initial investment cost and Unlisted fair market value, takin
Slide 5: EQT; Investor Capital Partners – Asia Fund
EQT Holdings 21 Investment professionals 43 SEK 4,243 m. Geographic focus Northern Europe Investment stage Mature Investment type LBOs 35% Investment horizon 3-8 years Sector focus Sector-wide Ownership Control or co-control Board representation >1 Exit IPO or trade sale 2004-12-10 www.investorab.co
Slide 6: Investments in strategic markets: U.S.
Investments in strategic markets 2004-12-10 www.investorab.com U.S. U.S. • Largest integrated market in the world • Entrepreneurial culture and tradition • Developed venture capital market • Strong link with Asia • Very competitive Investor Growth Capital – Healthcare and IT investments 2004-12-10 w
Slide 7: Investments in strategic markets: Europe
Investments in strategic markets 2004-12-10 www.investorab.com Europe Europe • Natural home market • Strong industrial base • Fragmented markets EQT – Buyouts in • Growth challenge Northern Europe Investor Growth Capital – Healthcare and IT investments in Sweden 2004-12-10 www.investorab.com 7
Slide 8: Investments in strategic markets: Asia
Investments in strategic markets 2004-12-10 www.investorab.com Asia Asia • Tremendous growth market Investor Growth Capital – IT investments in • Innovative and progressive Greater China, South Korea business climate and Japan • Rapidly increasing knowledge base Investor Capital Partners – Asia Fund
Slide 9: Our Venture Capital philosophy; Systematic monitoring of holdings
Investor Growth Capital Our Venture Capital philosophy • Focus on private equity style investing • Active involvement in company development • Industrial approach building a well diversified portfolio - industry sectors - geographies - development stages - private and public • Follow disciplined, co
Slide 10: Key success factors in Venture Capital
Key success factors in Venture Capital Management Market Technology/ + Timing Business model 2004-12-10 www.investorab.com Exit statistics for top quartile U.S. VC Funds Stars 1/3 Living dead 1/3 IPOs M&As 34% 41 % Written-off 25% Losers 1/3 Losses unavoidable 2004-12-10 www.investorab.com 10
Slide 11: Failures; Streamlining of Investor Growth Capital during 2004
Failures Quisic … Popwire Wrong Market management (non-existing) team Wrong Technology/ + timing Business model Spray/Lycos Europe failed Aplion Endovasix Melacure 2004-12-10 www.investorab.com Streamlining of Investor Growth Capital during 2004 Excess capital in the market • Streamlined team in IGC
Slide 12: Portfolio breakdown – Investor Growth Capital
Portfolio breakdown – Investor Growth Capital Market value, 9/30 2004 Sectors Markets Asia Fund and other Communications 7% 21% 18% Life Sciences 3% 14% Semi- Medical 13% conductors 40% 53% Devices 7% Europe 12% 6% Internet Services U.S. Pharma/ 6% Biotech Software Other IT 100% = SEK 7 156 m. 2004-
Slide 13: Ten largest holdings; Major transactions during the year
Ten largest holdings, alphabetically Market value, 9/30 2004 Bredbandsbolaget Claria Digia Greenway ~40% of Invesmart value (No investments ISTA larger than SEK 1 bn.) Kyphon Micronic Ness Display Tessera 2004-12-10 www.investorab.com Major transactions during the year As of 9/30 2004 New investment
Slide 14: Recent investment activities and going forward
Recent investment activities... …and going forward? 2005 and beyond Markets New investments during 2003 and up to Q3 2004 Asia 17% 51% 32% Europe U.S. 2004-12-10 www.investorab.com Recent investment activities... …and going forward? 2005 and beyond Sectors New investments during 2003 and up to Q3 20
Slide 15: We have delivered on IRR target; Key factors going forward
We have delivered on IRR target IRR >20 percent 1998 – Q3 2004 2004-12-10 www.investorab.com Key factors going forward • Market development • Technology development • Valuations and deal flow • Exit market 2004-12-10 www.investorab.com 15
Slide 16: www.investorab.com
2004-12-10 www.investorab.com 16