The most frequently asked questions (and answers)

The answer is yes. Venture investments would be considered a risky investment by most advisors. Especially the so-called "early stage" investments, as they often involve companies without significant revenue. For the same reason, it is recommended to ensure a good diversification of your investments, and in this context, fund models with many underlying portfolio companies/investments may be relevant to look at.

No, you probably can't say that. All venture investments must be seen as risky. The return in Nordic Bloom's funds has typically been around 18-20% p.a. and is thus a lot higher than, for example, listed shares, which have given around 10% p.a. in average annual return over the past 10-15 years. but conversely, these are not extremely high ROI, and especially not when you take illiquidity into account. This is because Nordic Bloom makes an extreme selection of investments, which provides risk diversification, while at the same time investing in enough companies that the chance of making a profit is relatively high. So you have a little more risk, but also the chance of a little more return. You could almost call Nordic Bloom a kind of "1st class venture ETF". In other words, investing in venture, but with a model that ensures greater security. For example, if it were a venture investment in a standalone company (like the ones you see on TV in "The Lion's Den"), you could expect a return of several hundred per cent on your investment, but conversely also accept that the majority of such investments will result in losses.

There are many different types of funds that can be utilised. For example, pension funds, endowment funds, VSO funds, free funds, company funds or VSO funds.

No, payments are made successively as investments are made in the underlying fund. This typically takes place over the first 3-4 years with roughly equal "instalments" of the amount you have subscribed for. If you subscribe for DKK 1 million, you will typically only have to pay in around DKK 250,000-350,000 annually until the full amount subscribed has been paid in.

No, payments to investors are expected to start 1-2 years after the end of the investment period (which is typically 3-4 years). In other words, this means that as the funds sell their underlying companies or parts of them, the proceeds will be paid back to the investors. The initial deposit is typically repaid after 6-8 years. The rest will be returns

The starting point is that you can sell your shares, provided the manager approves a new investor, but also that they are not liquid. Thus, you cannot expect to be able to sell your shares prematurely, and in most cases at a discount to the net asset value due to illiquidity.

In this type of fund with many underlying investments, this is the only way to avoid very high audit costs for each individual portfolio company and at the same time avoid the risk of so-called "principal taxation" of dividends. At the same time, US taxation is avoided in the Danish limited liability company, which according to the Danish Capital Gains Tax Act is "tax-free", i.e. taxed by the individual investor; be it an investor investing personally taxed funds, VSO funds, pension funds or investing via their own company.

No, they are in Nykredit, see below under depository.

Actively managed funds like these with specific selection of specific company investments take time, manpower and cost money as several hundred are often screened to select just one. However, the majority of the costs are variable and linked to performance, and there is always a minimum return to the investor before the manager receives a performance fee. Fixed annual fees are typically between 1.25%-2.00%, which is comparable to investment funds that manage listed shares!

The depositary requirement is statutory. It expresses the desire to separate the safekeeping of the assets and the management function, and also to keep the investors' assets separate from those of the manager. The depositary's tasks can be divided into 3 categories: 1) Monitoring the alternative investment fund's cash flow, 2) Custody of the fund's assets, and 3) Supervisory function. The depositary may delegate the safekeeping function to a third party provided that a number of requirements are met. However, in the event of delegation, the depositary is generally still responsible for this.

These are so-called §19 companies "Investment companies", which is why they are tax-transparent despite being organised as limited liability companies. The individual investor is thus the tax object, not the limited liability company. The A/S itself is subject to stock taxation, which means that any increase in value in a calendar year will be taxed the following year (by the individual investor).

Networking, networking, networking and a little history. The team behind Nordic Bloom has been involved in the provision and management of alternative investments for 20 years, previously managing more than USD 1 billion in such investments. This history has provided connections globally, some of which have led to collaborations with funds seeking a marketing platform in the EU/North.

We currently have more than 100 investors in our Danish funds, mainly wealthy private and family office investors. In the US funds, the number varies, but they typically consist of larger investors and a significant proportion of institutional investors.

We have so-called kommitments (drawings) for our funds of approximately DKK 400 million.

In numbers, we are not "heavy". However, we are in specific experience with these types of investments as well as screening, tendering and managing them.