**Protean Funds Update: Outperforming Benchmarks and Navigating AI Disruption**
We are pleased to report that Protean Small Cap outperformed its benchmark in September, rising 1.3% versus the CSXRN (SEK) index’s 1% gain. This brings our year-to-date return to 27.5% and our performance since inception to 42.7%, outpacing the index by 19.9%. Top contributors included ITAB, Devyser, and Valmet, while detractors were IBT, Fasadgruppen, and Embellence.
Meanwhile, Protean Select posted a 1% return for the month, bringing its year-to-date return to 12.2% and its performance since inception to 27.4%. The strategy’s volatility remains below 7%, roughly a third of the overall market’s risk. Long positions in Devyser, ITAB, and Fortnox were top contributors, while longs in Novo Nordisk, Neste, and Bravida were notable detractors.
In our latest letter, we explore the potential disruption of AI on the SaaS business model, which could pose a threat to companies like Vitec, a Swedish vertical software roll-up with a high market cap. We also discuss the “conspiracy of silence” surrounding ESG branding in the fund industry, where many managers privately acknowledge the ineffectiveness of ESG labelling but feel pressured to conform to industry norms.
We believe that true impact can only be made through actual, consequential actions, rather than relying on marketing labels. Our approach to ESG is guided by rationality, not marketing considerations, and we focus on laws and regulations as the most effective way to drive positive change.
In terms of portfolio updates, we have added Ework, a Swedish intermediary company connecting independent consultants with businesses, and have built positions in ITAB and Mowi. We have also trimmed our Boliden position and traded SSAB in response to market volatility.
We remain committed to our investment approach, optimising for performance rather than convenience or marketing, and thank our investors for their trust.
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