Stillfront: Right place, right time
As a fund manager, few things are more exciting to talk about than investment success stories. Naturally, not nearly all of our decisions since launching DNB Fund Nordic Small cap in December last year have been successes, but our Stillfront investment has so far deserved that label.
Stillfront is the largest position in the fund and has been so more or less throughout the year. The share is up by more than 130% YTD, and like any other investment success, our Stillfront story has been a perfect symbiosis of a (so far) correct investment thesis and a bunch of luck on top.
In investing, when talking about errors, we generally talk about being overly optimistic about the future development of a company. Absent of luck, these errors may lead to huge and disastrous investment mistakes where you buy and hold a stock, and it turns sour, eating into your principal. As a consequence, it is said that you learn more from your mistakes than from your successes. We tend to agree, but believe that some success stories (like Stillfront in this case) may give valuable insights as well: Attractive investment cases are often even better than you first dare to think, and as a portfolio manager underestimating successes is also a sin.
Attractive investment cases are often even better than you first dare to think, and as a portfolio manager underestimating successes is also a sin.
Stillfront at a glance
Stillfront is a group currently consisting of 14 game development studios headquartered in Sweden, focusing on free-to-play games for mobile, tablet and browser gaming, with in-app purchases accounting for close to all of the revenues. The group has traditionally focused on strategy and simulation games, but through large and transformative acquisitions on top of solid organic growth, Stillfront has become a more diversified player while also growing its top-line rapidly from just north of SEK 100m in 2016 to an estimated top line well above SEK 4bn in 2020 to match its market cap of close to SEK 30bn.
Stillfront: Sales development 2016A-2022e and Revenues by user vintage
