Together with Rune Andersson and Mellby Gård, Gustaf Tapper started the portfolio that would become the investment company Antap Capital in January 2019. It was the stability of a family business and the long-term perspective that Mellby Gård values that appealed to Gustaf Tapper, CEO of Antap Capital.

- If you are to manage a stock portfolio, long-termism is one of the most important factors. Then it felt good to have such a long-term main owner behind you. Also, I was convinced that this would be both fun and challenging!

Long-term and stability in focus
Antap Capital's portfolio today has a wide range of shares in Swedish industrial companies such as Trelleborg and VBG, trading companies such as Christian Berner and Bufab and the electricity grid company Dala Energi - but also owns shares in several foreign companies. Antap Capital primarily seeks profitable companies that operate in a market with few competitors, have the ability to protect their business from new competition and have a strategy to charge the right price for their products, i.e. optimize pricing.

The share portfolio mainly consists of three groups: value shares in mature industries such as electricity grids and banks, industrial companies with a strong history and leading position. The third group are highly profitable small companies with higher organic growth in, for example, medical technology.

- Value stocks are companies that may not have seen such high growth for a long time, but have stable profitability, strong cash flows, high dividends and a low valuation. Highly profitable, small growth companies typically operate in high growth submarkets and generally have only one or a few competitors worldwide. Norwegian Medistim is an example and we bought shares there early in 2019.

Gustaf Tapper adds:

- You can say that I like manufacturing companies that have unique products that create value for the customer, have high market shares in a niche market, with good pricing and high entry barriers for new competitors. In the Nordics, we have several examples of this type of company that have become extremely profitable and created enormous value for their shareholders: Vitrolife and Biotage are two examples. Another one that many have probably forgotten is Nobel Biocare, which in the early 1990s was a small spin-off from Nobel Industrier, but which over time became worth more than the entire Nobel Industrier.

What distinguishes Antap Capital from an equity fund is that the company has long-term money and therefore does not need to have the same short-term focus as an equity fund where the risks of large withdrawals make it difficult for a manager to deviate from the stock market index composition. Antap Capital can therefore choose to invest more of the portfolio in companies that they really believe in - even if this means a risk of periodically deviating from the development of the stock market.

Eventful first year of operation
Since the company started in 2019, there have been five turbulent years with major fluctuations in the stock market. In early 2020, the pandemic hit and the world's stock markets fell wildly, but it turned around and then came 2021, which was a fantastic stock market year when profits soared and ultra-low interest rates fueled stocks as an asset class. Then came Russia's invasion of Ukraine in February 2022, inflation ran rampant and central banks changed tack. 2022 was a weak stock market year which was followed by a nervous 2023 with big jumps.

- When you look back, it is easy to see some things that the whole market should have taken into account more in the last days of the year 2021, when optimism was at its peak. But few were prepared that Russia would actually dare to launch a full-scale invasion of Ukraine in 2022. Regardless, it was the money supply and massive stimulus during the pandemic that set the stage for the return of inflation. The war became a catalyst that accelerated the price increases.

Exactly how a company coped with previous crises is one of the factors that Gustaf Tapper finds most interesting. He usually goes back to the financial crisis of 2008-2009 to see how a certain company fared then.

- As a manager, you want as few surprises as possible. This may sound boring but I usually say: I don't like surprises. Above all, I look for well-managed companies with a built-in stability in the business that have shown that they were able to handle previous deep crises in a good way. Take the trading company Bufab, which has never made a loss since its inception in 1977. Bufab was one of the first companies to receive a place in our portfolio in 2019.

Gustaf adds:

- It is also important to have a management that is not satisfied that things are going well today but strives for new records tomorrow and always puts profitability before volume.

Global market signified by turbulence
2024 could be another turbulent year geopolitically with continued war in Ukraine, which means major tensions between Russia and Western countries. And on top of that the risk of a bigger war in the Middle East, not to forget the Taiwan issue and the political row in the US, topped off with that presidential election in the fall.

- We have not had a war in Europe since 1945 that is similar to what is now going on in Ukraine. Just look at the huge ammo consumption. We don't know how it ends and what might happen in Russia afterwards. This at the same time as the economy weakens. If interest rate cuts in the US, which everyone is now waiting for, are delayed, then there will be a setback to the stock market rally that ended last year.

- Otherwise, I see good chances that the small companies will have a good year. In 2023, there were many profitable and well-managed small companies that fell dramatically in price on the stock market, especially in early autumn when long-term interest rates in the US also rose sharply and reached 5 percent. Back then, nobody wanted to buy small companies, and they have a lot of ground to make up now.

The stock market rally at the end of 2023, which was triggered by an unexpectedly low inflation figure in the US during November, has meant that the market has already priced in a very optimistic scenario in the major listed companies. The interest rate hikes by the central banks are over for this time - but at the same time, recession in several countries cannot be ruled out, which will dampen the investor collective's joy over interest rate cuts. Many Swedish listed companies will also face tougher comparative figures when the strengthening of the krona that occurred at the end of 2023 affects the results later this year.

A stock portfolio is never finalized
Antap Capital is looking for companies that can cope with a weak economy without large savings packages and price reductions.

- The big challenge is to find companies that have the ability to keep their profits despite demand leveling off or falling, and willing to pick up some market share. Manufacturing companies with high product quality, global direct sales and preferably a large aftermarket business have the best conditions. Examples of this type of company in our portfolio are Trelleborg, VBG and Alleima on the Stockholm Stock Exchange. Among our foreign companies, this applies to a large extent to Chemring in Great Britain or GEA in Germany, which is Alfa Laval's main competitor.

Antap Capital also has investments in stable industries such as the electricity grid company Dala Energi and the tobacco company Scandinavian Tobacco Group. Occasionally, companies disappear from the portfolio in connection with takeovers, such as when Ellevio bid for Edsbyns Elverk in autumn 2021.

- If it happens, it happens. I don't count on takeovers, but it is definitely part of the analysis when I choose companies - the question: is there a chance for a takeover? In 2023, we received bids for two holdings - Albireo Pharma and Opsens in North America - and the year before Swedish Match here in Sweden.

A share portfolio is never quite complete, it changes all the time, while at the same time it is important to hold on to the holdings that Gustaf Tapper describes as the companies that "outdo themselves".

- It is like an ongoing test, where over time you find which companies exceed expectations and seek the answer to the question why? What is the recipe? As a manager, you want to increase in good companies that deliver, while those that have not delivered after years of various explanations and excuses from the management end up on the sell list - those companies often have managements and principal owners who have difficulty understanding the investors and what it means to be a listed company company.

Gustaf Tapper rounds off the reasoning with two examples.

- The first shares we bought on our first day on the market, January 15, 2019, were GEA and Cloetta. We still have the entire holding in GEA, while we reduced in Cloetta.

In 2023, Antap Capital expanded the management with a new portfolio - completely focused on large companies on the Stockholm Stock Exchange, where the largest holdings are currently Handelsbanken, SEB, Trelleborg and Alleima.