Summary 2014

• Annual return of 10.0% or NOK 225 million
• 20 % annualised return since inception
• Receipts from redemptions and dividends totalled NOK 817 million
• New investments totalled NOK 234 million

Market
The secondary hedge fund market has changed somewhat during the year. Large players have entered the field and purchased large portfolios through newly established investment mandates. Funds with underlying high quality have tilted towards less discount, while funds with exposure to emerging markets have, for various reasons, seen increased levels of discount.

Portfolio
The portfolio has, on a general basis, performed well throughout the year, mainly due to redemptions from high quality funds. One investment in particular has, through a very successful exit, contributed to a significant increase in the portfolio's result. Despite of this, this year's performance is well below the average IRR since inception. Since it was launched in August 2010, the portfolio has generated a return of NOK 1,117 million from NOK 1,450 million of allocated capital. The value of the portfolio, after adjusting for the transfer of NOK 315 million to the group, was NOK 2,252 million at the end of the year.

The portfolio has, on a general basis, performed well throughout the year, mainly due to redemptions from high quality funds.

Organisation
The head of the Special Investments portfolio resigned from Ferd in 2014. Because of this, there will be less of a focus on new investments in the secondary hedge fund market in the future, and the current portfolio will be managed in order to maximise the value achieved in the remaining investment period.

Ferd is in the process of recruiting a new manager for the area, with the objective of investing in types of asset that are attractive for Ferd but fall outside the strategies followed by our other areas.