As of the end of October 2021, the NAV of Croatian UCITS funds stood at HRK 21.69bn (25.6% YoY)

With the asset managers playing such an important role in the Croatian capital market, it is interesting to see how well they performed since the beginning of 2021. As can be seen from the graph below, NAV of all funds has continued its steady increase for the 19th consecutive month, and as of October 2021 stood at HRK 21.69bn (+0.8% Mom or +25.6% YoY).

The largest absolute increase on a YTD basis of AUM was observed in bonds, which grew by HRK 793.9m (+6.8%). Deposits and cash followed with HRK 760m (+17%), followed by shares with an increase of HRK 737.7m (+42%), and investment funds with an absolute increase of HRK 639.2m (+81%). On a MoM basis, shares and investment funds recorded the highest absolute increase at HRK 125m (+5%) and HRK 94.6m (+7%), respectively.

When taking a look at the asset composition of Croatian UCITS funds, investment funds have noted a slight increase in AUM of 2.3% and currently hold 6.4% of total AUM, which is higher than the 10y average of 2.9%.

We also note that domestic shares account for 25% of the total equity holdings. Domestic equity has thus far in 2021 seen a 25% YTD increase, while foreign equity experienced a 49.4% YTD increase.

Bond holdings continue their trend as the largest asset class of the Croatian UCITS funds, accounting for 56.5% of total AUM. This represents a decrease of -5.7 p.p. YTD. This is due to the increases in other asset classes like investment funds, shares, and loans on the money market. Bonds did experience a relatively small YTD increase in its assets, with them amounting to HRK 12.53bn (+6.8% YTD).

Total Assets of All Croatian UCITS funds (2015 – October 2021) (EUR m)

Source: HANFA, InterCapital Research

Net contributions in October amounted to HRK 79.5m, reaching a total of HRK 3.22bn YTD. When comparing it with the pandemic year of 2020 when net contributions in the ten months of 2020 were at HRK -5.63bn, strong improvement can be seen in 2021. In the ten months of 2021, 50.7% of net contributions went to the bond market, that is, HRK 1.63bn. Other types of investment funds grew as well, with net contributions amounting to HRK 610.4m.

Following the recapitalization, Valamar will have a business share of 24.54% and WB will have a share of 75.46% in the share capital of Valamar A.

The decision comes on the back of the Supervisory Board meeting of the Company on November 23rd, in which it was decided that Valamar A (a subsidiary of the Company in Austria) will after recapitalization, receive a capital increase in the amount of EUR 11.7m.

Following the recapitalization, Valamar will have a business share of 24.54% and WB will have a share of 75.46% in the share capital of Valamar A.
Consequently, a new partnership agreement will be concluded between the members of Valamar A which will regulate mutual relations and changes in accordance with the relevant Austrian regulations.

Hotel Marietta 4* has 120 keys and is one of the largest and most successful hotels in the Obertauern ski resort. It offers its guests a great location within the ski resort and is close to all amenities in the destination. After the finalization of the takeover process, Valamar will manage two hotels in Austria.

Valamar also plans further investments in Austria which will include investments in the repositioning and upgrading of the quality of services in Marietta Hotel as well as Valamar Obertauern Hotel. The completion of the transaction is expected to be met by the end of 2021.