Saga II Eur K/S

Management’s review

Performance in the financial yearThe secondary process was completed in 2020 resulting in a sale of Saga II EUR’s commitments to five portfolio funds.The financial year resulted in a profit of EUR 0.3 million. Gains on investments in portfolio funds amounted to EUR 0.4 million. Administrative and Interest expenses amounted to EUR 0.1 million.This years result is in line with the management’s expectations.In the financial year an amount of EUR 1.7 million was distributed to the limited partners, bringing accumulated distributions to EUR 317.0 million, corresponding to 133.1% of the limited partners’ paid-in capital. An aggregate amount of EUR 1.7 million was received as sale proceeds distributed from portfolio funds during the financial year, bringing total distributions from portfolio funds to EUR 321.1 million, corresponding to 144.6% of the capital contributed to portfolio funds.Special riskFinancial riskThe objective of Saga II EUR is to supply risk capital to the portfolio funds, and also to their investments in competitive companies in the European small and mid market. The highest factor of risk is therefore the changes in the value of the companies in which Saga II EUR’s portfolio funds invest in, which to a significant extent depend on the valuations of comparable listed companies on the quoted market. The valuation of investments in portfolio funds is based on an estimate and could therefore be connected with some degree of uncertainty.Interest rate riskSaga II EUR is less sensitive to the changes in interest rate levels.Foreign exchange currency riskSaga II EUR’s investments in portfolio funds have been made in EUR and GBP. As the capital in Saga II EUR is in EUR, Saga II EUR is influenced by currency fluctuations in GBP. The currency risk is therefore considered as material. In accordance with Saga II EUR’s investment policy Saga II EUR does not hedge its exposure toward currency rate fluctuations.Investment activityIn the period from inception to 30 September 2020 Saga II EUR has invested in seven portfolio funds. All the investments have either been sold or liquidated as of 30 September 2020.Since inception the portfolio funds have in general performed below expectations.Cash resourcesSaga II EUR’s cash resources as of 30 September 2020, include cash and cash equivalents and outstanding commitments from the limited partners and are estimated as satisfactory to cover Saga II EUR’s liabilities.Expectation for 2020/21It is expected that the partnership will be liquidated in 2021.