Kavaljer Quality Focus May 2026 – Strong Equity Markets and Increasing M&A Activity

Strong stock market month
May was characterized by broad-based equity market gains, with the Stockholm Stock Exchange (OMXSPI-GI) rising 3.4% and the global equity index (Dow Jones Global Index) advancing 4.8%. Kavaljer Quality Focus delivered a strong return of 7.2% during the month. Over the past five years, the fund has returned 19.7%, compared with 39.4% for the Stockholm Stock Exchange and 2.2% for the Swedish small-cap index.

Increasing frequency of acquisitions and takeovers
Sweden has been in a recession since 2022–2023, creating a market environment where momentum stocks have been rewarded with high valuation multiples, while fundamentally strong companies with temporarily depressed earnings have been overlooked. This valuation disconnect has created attractive opportunities for both strategic acquirers and financial buyers.
During the month, portfolio holding Nilörngruppen received a cash offer from industry peer Trimco Group at a 53% premium.

With shareholders representing 66% of the voting rights already committed to accepting the offer, the likelihood of completion appears high.

In-depth perspectives on selected portfolio holdings
In this month’s letter, we take a closer look at several key developments among the fund’s holdings. We present a comprehensive review of Nederman, the global leader in industrial air filtration, which we believe combines a strong market position, structural growth drivers, and recession-level earnings with a historically low valuation.

We also discuss Carasent’s acquisition of Infosolutions, a strategically important transaction that strengthens the company’s competitive position, increases pricing power, and has the potential to significantly improve profitability over time.

In addition, we review a number of value-creating acquisitions completed by portfolio companies, including Exsitec’s acquisition of Amesto Solutions, Svedbergs Group’s expansion into the Czech Republic through the acquisition of UBC, and Storytel’s acquisition of Overamstel Publishers in the Netherlands and Belgium.

The monthly letter also includes further updates on portfolio developments and recent changes in holdings.