morten lund
Tuesday, December 27, 2005
 


I WONDER (PART I): Icelandic Viking Caital
The Iceladic Capital is slowly taking over a lot of Danish and British companies in very agressive and yet simple constructions. They simple use the leveraged buyot model (you pactically buy a company via taking loans in their own assets like buildings and cashflow) - but I dont understand how this TINY TINY nation can poduce such an agressive style and EXECUTE IT. Im VERY impressed with the execution: Our low cost Airline, Our ShoppingMalliant, Our Bank for B2B... all taken over over nigth - with no bullshit (yet) style - just pure execution.

And Im NOT NEGATIVE or DEPRESSED - nope - Im impressed and happy to see some young (pretty young) dudes taking a hit at the establishment - AND I DONT CARE IF IT WILL SURVIVE or IF ITS LONG LASTING - since most of these companies would have gone bankrupt any. I just like the approach and I think I know better then quite a lot of people that you have to shoot a lot to make a homerun ',)

I migth be a little jaloux (positivly - I use jalouxi as a driver) at the fact - that its not me being on board in these tranactions. Since buying a SUPERMALL WITH PRESENCE IN 5 CITIES - next to nothing - by selling the property is smart. Specially if you also own some of the largest fasions retailers in UK. I hope that these guys have capital reserves to keep up with the speed - and that they can make some exits to keep up.

NOTE: The common saying here in denmark - is that the whole Icelandic phenomenon is sponsered by Russian money and made by insider trading - but I dont buy into that. Well DENMARK is more or less Maersk and his boards and his network all over (could be called INSIDER AS WELL) - and Iceland is a very small country and that means means a small business network. For the Russian thing - well whats wrong with Russian money (well some are Oligark money made - in maybe suspicious mannors - and should be avaoided 100%) but I see no difference to American, Japanese or German money. I like that Rusia is taking off - and if the guys choose to buy a football clud in Chelsea or Invest via Iceland fine with me. very fine.
 
Comments:
It is not Iceland that is generating these acquisitions, the people/companies are just Icelandic. Its all the hype here in Copenhagen that is making us believe that "Iceland" is taking over. No such thing. Baugur, Straumur, Björgulfsson etc are doing it. Not Iceland!

Apart from that, there is nothing sensational about LBO's in my opinion. Fact is that apparantly, these people are gearing capital very aggresively (according to our information - we never know). Massively geared buyouts are a question of guts and attitude, in these times where big money comes fast and cheap.. and perhaps gearing to this scale is easier when you seem to own the banks yourself (again, assumption).

Anyway the risk that they seem to be running is that when one acquired company fails, losses need to be recouped from the other acquired businesses. With a majority of your holdings being debt financed, it takes little or no businessdegree to appreciate that the structure will only take a certain amount of damage before collapsing.

Having said that, I fully agree with your enthusiasm. Obviously this aggressive manner of investing is an inspiration to the security-obsessed danish investorclimate.
 
I WONDER (PART I): Icelandic Viking Caital
The Iceladic Capital is slowly taking over a lot of Danish and British companies in very agressive and yet simple constructions. They simple use the leveraged buyot model (you pactically buy a company via taking loans in their own assets like buildings and cashflow) - but I dont understand how this TINY TINY nation can poduce such an agressive style and EXECUTE IT. Im VERY impressed with the execution: Our low cost Airline, Our ShoppingMalliant, Our Bank for B2B... all taken over over nigth - with no bullshit (yet) style - just pure execution.

And Im NOT NEGATIVE or DEPRESSED - nope - Im impressed and happy to see some young (pretty young) dudes taking a hit at the establishment - AND I DONT CARE IF IT WILL SURVIVE or IF ITS LONG LASTING - since most of these companies would have gone bankrupt any. I just like the approach and I think I know better then quite a lot of people that you have to shoot a lot to make a homerun ',)

I migth be a little jaloux (positivly - I use jalouxi as a driver) at the fact - that its not me being on board in these tranactions. Since buying a SUPERMALL WITH PRESENCE IN 5 CITIES - next to nothing - by selling the property is smart. Specially if you also own some of the largest fasions retailers in UK. I hope that these guys have capital reserves to keep up with the speed - and that they can make some exits to keep up.

NOTE: The common saying here in denmark - is that the whole Icelandic phenomenon is sponsered by Russian money and made by insider trading - but I dont buy into that. Well DENMARK is more or less Maersk and his boards and his network all over (could be called INSIDER AS WELL) - and Iceland is a very small country and that means means a small business network. For the Russian thing - well whats wrong with Russian money (well some are Oligark money made - in maybe suspicious mannors - and should be avaoided 100%) but I see no difference to American, Japanese or German money. I like that Rusia is taking off - and if the guys choose to buy a football clud in Chelsea or Invest via Iceland fine with me. very fine.
 
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