We deliberately do not apply an overall view of where the markets might be headed. However, in 2016 we did take the view that we did not want to increase Ferd’s risk exposure. Activity levels were very high in all Ferd’s business areas, and we made many promising investments in 2016. Ferd Capital invested approximately NOK 2.2 billion, while our portfolio companies also made investments directly.  Ferd Real Estate invested approximately NOK 450 million in 2016. Equity investments in 2016 were primarily financed by realising other investments in order to ensure that Ferd’s overall risk exposure was unchanged. We also took care in 2016 to maintain our strong liquidity position and, at the end of 2016, we had total available liquidity in the form of bank deposits, liquid investments and credit facilities of nearly NOK 14 billion.

An important target for risk management at Ferd is that the group’s financial performance creates the foundation for it to develop in a sound and stable way in accordance with our vision. The results achieved by our various business areas vary from year to year, but ensuring that risk is well spread across our activities and that we strike a balance that makes it possible to adapt quickly to changing market conditions has provided stability and been very important to Ferd’s development. We have achieved an annual return over the last ten years of 9%, which is something we can be satisfied with in view of the market conditions and low interest rates that we have seen over much of this period.

An important target for risk management at Ferd is that the group’s financial performance creates the foundation for it to develop in a sound and stable way in accordance with our vision.

Ferd Capital’s pleasing return of 18% for 2016 reflects the strong performance delivered by a number of the companies in the portfolio. The divide in the Norwegian economy was again pronounced in 2016, and this was reflected at Ferd Capital’s companies. Those companies that operate in oil and offshore were hit by the low level of activity in the sector, while those that target other markets, such as for example domestic consumption in Norway, experienced stronger market conditions and performed well.

There is a lot of competition in the Norwegian market for company acquisitions. Low interest rates and easy access to capital have resulted in investors being willing to accept low risk premiums. Leveraging our comparative advantages such as our ability to take a long-term and flexible approach enabled us, however, to achieve our targets in a number of the transactions in which we were involved. Ferd made two large investments in stock exchange listed companies through Ferd Capital in 2016, namely Scatec Solar and the UK-based company Benchmark Holdings. We also increased our ownership interest in PGS in connection with a capital increase carried out by the company. We believe that stock exchange listed companies represent attractive investment opportunities in situations where Ferd Capital is able to use its expertise in company analysis and active ownership.

There is a lot of competition in the Norwegian market for company acquisitions. Low interest rates and easy access to capital have resulted in investors being willing to accept low risk premiums.

Aibel was very quick to adapt its capacity and cost base to the low oil price and the lower level of activity in the industry, and it has won a number of major contracts thanks to its greater competitiveness. Towards the end of 2016 the company won four important contracts that together represent total contract value of over NOK 5 billion.

Interwell carried out a comprehensive improvement program in 2016 and reported higher revenue from the North Sea and North America. The market for permanently plugging oil and gas wells is a promising area for Interwell, and the company took important new steps in the development and commercialisation of its proprietary technology for this market in 2016.

Servi is the company in Ferd Capital’s portfolio that has been hit the hardest by the fall in the price of oil. Comprehensive cost reductions were needed to secure its profitability and competitiveness.

Mestergruppen achieved very strong revenue and profit growth in 2016 thanks to the acquisitions it made and its operational performance. XL-Bygg and Byggtorget, two member-owned building materials chains, were acquired by Mestergruppen in 2016. We think these acquisitions will create significant value thanks to higher volumes, operational efficiencies and synergies.

Elopak achieved satisfactory earnings growth in 2016. The results of its investment in recent years in the aseptic packaging market as well as its new factory in Canada are now starting to be seen.

Swix also performed well in 2016. Its acquisition of the HardRocx cycle supplier and the growth it has achieved in the outdoor segment with the Ulvang and Lundhags brands have helped make the company less dependent on the right snow conditions.

2016 was also a satisfying year for Fjord Line, not least thanks to passenger growth, its in-sourcing of its tax-free shopping operations, and its attaining authorisation to carry domestic passengers and cargo between Bergen and Stavanger.

2016 was a historically good year Ferd Real Estate. Low interest rates helped create a high level of demand for residential real estate. This, combined with the low availability of residential real estate, created very strong price growth in the residential market, and this increased the profitability and value of our residential projects. Ferd Real Estate sold 440 residential units in 2016, which were principally in Tiedemmansbyen in Oslo’s Ensjø district. Ferd Real Estate also reported a strong performance from its commercial real estate portfolio in 2016. At the end of 2016, the total equity value of Ferd Real Estate’s portfolio was NOK 3.0 billion, with the portfolio having generated a return in 2016 of NOK 750 million.

2016 was a historically good year Ferd Real Estate.

Ferd Invest holds a portfolio of shares in Nordic companies, focusing principally on companies listed in Oslo and Stockholm. At the end of 2016, the market value of Ferd Invest’s portfolio was approximately NOK 5.3 billion. The return achieved in 2016 was 0.6%, which is not satisfactory when measured against Ferd Invest’s benchmark index. However, over the last five years the portfolio has outperformed its benchmark index by 0.7 percentage points each year.

The value of Ferd’s hedge fund portfolio was approximately NOK 3.4 billion at the end of 2016. The portfolio fell 1.5% in USD terms in 2016, while its benchmark index was up 1.9%. Its performance in both relative and absolute terms was principally driven by the weak performance of the equity strategies in the portfolio, with strong sectoral rotations in the equity markets making 2016 a difficult year for a number of our equity fund managers. Over the last five years, Ferd Hedge Fund has outperformed its benchmark index by 0.4 percentage points per year.

In March 2017 Ferd’s Board of Directors appointed Morten Borge as my successor as CEO. Morten has been at Ferd for almost nine years and knows Ferd’s owners, its business, and the organisation well. Ferd’s owners and all its employees can therefore be certain that their new leader stands for the values upon which Ferd is founded. Ferd’s resources are significant from both a financial and organisational perspective. I am sure that under Morten’s leadership Ferd will develop in line with our vision to create enduring value and leave clear footprints.

Ferd’s resources are significant from both a financial and organisational perspective. I am sure that under Morten’s leadership Ferd will develop in line with our vision to create enduring value and leave clear footprints.