FA: John Frederiksen has hired a lawyer for Aeternum’s exit

Billionaire John Frederiksen has applied to redeem all of his money in the investment fund Aeternum, the fund announced on Wednesday. This means the fund will lose its largest clients and nearly two-thirds of its assets when Frederiksen leaves.

“It is of course sad that the Frederiksen family will not join the journey further,” Aeternum CEO Vegard Søraunet told DN on Wednesday.

It is not yet known why the famous billionaire withdrew, however FinanceAffairs.com He writes Thursday evening that Frederiksen reacted negatively when he found out the fund had pledged certain investments. This is said to be a violation of the agreement between the fund and its investor clients, prompting Frederiksen to appoint his own lawyers to the case.

Ski investment with loan

It is the investment in Swedish company Skistar that should have provoked Frederiksen’s reaction. Skistar owns and operates sports facilities in Norway and Sweden, including ski facilities in Tryssel and Hemsedal.

According to Finansavisen, the fact that Aeternum’s purchase of 19.6 percent of the company’s shares will be financed with a loan of NOK 600 million prompted Frederiksen to respond. Frederiksen believes this is a violation of the fund’s articles of association, as the fund cannot make leveraged investments.

With a fifth of the shares, Aeternum is the second largest holder in Skistar.

Finansavisen has been in contact with Frederiksen’s lawyer, Jørn Terje Christensen at the law firm Christensen Berg, but has not confirmed the case.

Attorney Christiansen did not respond to DN’s inquiry Thursday evening.

Aeternum’s chief director, Vegard Søraunet, will not comment on Finansavisen, but the newspaper republishes Søraunet’s explanation of the lending issue. According to Søraunet, Aeternum’s investment is not guaranteed. Instead, Skistar founder Erik Poulsson’s investment company Backahill Lindvall was mortgaged for NOK 600 million, and it was this investment company Aeternum that bought it to acquire Skistar shares.

Søraunet did not respond to DN’s inquiries on Thursday evening for clarification on this matter.

Year of crisis

The Aeternum Fund was launched in 2021, and Frederiksen was the fund’s first lead investor. When the fund was at its peak, Frederiksen owned 74 percent of the fund, which was then worth about seven billion. By then, assets under management had grown by about ten percent since inception, and Frederiksen’s investment had reached NOK 4.7 billion.

But while the fund got off to a great start in 2021, last year was a bit of a bullet. When the accounts were settled for 2022, the fund was left with a negative return of 38 percent.

“We were not immune to the carnage, and the fund’s return in 2022 did not disappoint,” the company wrote in a Linkedin update earlier this year.

After the huge success of last year, Aeternum 2023 has started well. In mid-April, the fund was up 18 percent. At the time, the fund had about $7 billion under management, and had been in the red since the fund’s inception.

But only five of the fund’s 14 listed stocks are in the red so far this year.

– Stock prices have been volatile during our ownership period and we are not satisfied with the return we have achieved so far. Meanwhile, the core businesses are doing well, and in the private portfolio, we have also created good value through realizations and increased NAV values, Soronit told DN on Wednesday.

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