2023 Hvaler Invest results at 16.4%

After a stunning 2022 with 44% ROE Hvaler Invest AS delivered a solid performance in 2023, with 16.4% ROE and 14.4% ROI, bringing our average ROE in at about 35% on average over the last 3 years. We had some leverage throughout the year, reducing it steadily towards the end of the year to be ready for new opportunities (<10% of investments on average). Protector was our star performer, with a stunning 65,5% ROI, driven by strong underwriting results (as always) and an improved market situation in the UK. Crayon also contributed positively with 11.5% ROI (with a lot of fluctuation during 2023). However, our IT consulting investments did not meet our expectations, meaning B3 Consulting Group and Webstep, which suffered from -18% and -20% ROI respectively. We are in the board of directors in both companies and have used a lot of time and resources to contribute to improving their performance going forward. The IT consultancy market was challenging in 2023, especially in Sweden, and we expect these investments to yield results from 2024 and onwards. We have reduced our position in Protector substantially in 2023, to invest heavily in Crayon. Let’s wait some 1-3 year to see if this was a good move or not (currently it’s not). Overall, we are satisfied with the results in 2023.

During the year we have hired two students from NHH Børsklubben to help us with analysis and they continue to impress us. The addition of David in Hvaler have also added a new dimension to the company in terms of insight and capacity.

2023 was the “year of Protector” but we expect that 2024 will be the year of IT and consultancy, and we are searching for new opportunities in the insurance and banking space.

Hurdle rate is still 15% on equities and most of our investments where we are not in the board delivered on this in 2023. Discount to intrinsic value is still very significant on our top 3 picks.
Hurdle rate when entering a board is still 30% and while we were far from delivering on this in 2023, we expect to do so going forward (and then some).

 All the best,

David Bjerkeli
Analyst, Hvaler Invest
Lillestrøm, 22.05.24