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megatrendsOverview of Megatrends3. Resource ScarcityCHALLENGEOPPORTUNITYRapid population growth is placing increaseddemand on strained resources. Meetingfuture resource needs represents a significantchallenge and opportunity1,2. Resource scarcity –encompassing water, food, land, energy, and otherkey natural resources such as rare earth metals,wood and fisheries – will impact many sectors, i.e.agriculture, waste, infrastructure, and raw materialavailability3,4,5,6,7.Meeting the increasing and diverse resource needsof growing economies and populations is deemeda significant risk but also an opportunity for manysectors. Businesses will need to make significantchanges to their operations to combat resourcescarcity. This requires more efficient methods infood production (i.e. biotechnology, technologiesand equipment for agriculture and aquaculture),waste management and recycling, shared economy(systems to facilitate sharing of underused assetsand services), as well as efficiency improvements ininfrastructure to reduce resource use and wastage.Population growth will place increasedemand on strained resources4. Population GrowthCHALLENGEOPPORTUNITYFrom 1950 to 2015 the world population grew from2,5 billion to 7,3 billion. By some estimates, this willcontinue to rise by more than one billion peoplein the next 15 years, reaching 8,5 billion by 2030and 11,3 billion by 21002. The Nordic region largelyfollows the global, positive population growth trend.However, Europe overall is likely to experience adownward trend, resulting in a smaller populationin 2050 than in 20152.Population growth means an increased numberof people to sustain, including an estimated threebillion new middle-class consumers entering theglobal market by 2030. This creates opportunitiesfor growth in numerous commercial areas, such asconsumer goods, construction, education, medical,transportation and energy.World population to reach8,5 billion by 20301234Ellen MacArthur Foundation, 2014.UN, 2015. World Population Prospects, 2015 RevisionWorld Economic Forum, 2016. TheGlobal Risks Report 2016.World Bank, 2015. Ending Poverty and Hunger by2030. An agenda for the global food system.56Carbon Trust, 2015. Titans or Titanics?Understanding the business response toclimate change and resource scarcity.World Economic Forum, 2016. Trend: Scarcityof Resources [accessed September 2016]78Food and Agriculture Organization ofthe United Nations, 2016. The State ofWorld Fisheries and Aquaculture.Nordregio, 2016. Nordregio Report 2016.Chapter 2 Urbanisation: A core featureof Nordic population growth.9

Overview of Megatrends5. Energy Efficiency & Climate ChangeCHALLENGEOPPORTUNITYHuman influence on the climate system is clearand growing, and at a 95 per cent confidence level,humans are the main cause of present globalwarming. Anthropogenic greenhouse gas emissions(carbon dioxide, methane, nitrous oxide, ozone),driven by economic and population growth, aretoday higher than ever1.In order to meet national and internationalemissions targets, countries look to a variety ofmeasures: EU and international emissions tradingmarkets, international cooperation and projectbased cooperation, energy efficiency improvementsand promotion of renewable energy. As such, theemissions targets present opportunities to generatevalue by contributing towards the transition to asustainable, low-carbon economy through energyefficient technologies, energy infrastructuresolutions, urban energy efficiency amongst others.Humans are the main causeof global warming6. Technology DisruptionCHALLENGEOPPORTUNITYDigital technologies are disrupting and transformingthe worldwide economy. As affordability andavailability increase, demand is likely to rise. Analysissuggests that the global digital economy (as a shareof gross domestic product) will grow from 22,5 percent in 2015 to 25 per cent in 2020, representingUSD 24 615 billion2.Technological advances may be leveraged acrossall sectors to reap commercial benefits whilstenhancing environmental and social goals. Further,technological developments facilitate moretransparency, improved compliance and moreefficient information sharing and transactions.Considerable opportunities exist in areas such asdigital education and training, business servicesand health care. In addition, some technologiesshow promise in application across a wide rangeof sectors, i.e. fintech, IoT (Internet of Things), dataanalytics, digital marketplaces and SaaS (Softwareas a Service).The global digital economy couldgrow from 22,5% to 25% by 20201012IPCC, 2014. Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of theIntergovernmental Panel on Climate Change [Core Writing Team, R.K. Pachauri and L.A. Meyer (eds.)]. IPCC, Geneva, Switzerland, 151 pp.Accenture, 2016. Digital disruption: The growth multiplier [accessed August 2016]

investment themesMegatrends and Investment ThemesMEGATRENDS3. Resource scarcity1. Ageing Demographics2. Movement of people4. Population growth6. Technology Disruption5. Energy efficiency& climate changeINVESTMENT nabledbusinessPORTFOLIOUN SUSTAINABLE DEVELOPMENT GOALS11

Summa’s Investment ThemesRevenue DistributionRESOURCE SCARCITY:SEK 1699mTECH-ENABLED BUSINESSES:SEK 347mCHANGING DEMOGRAPHICSSEK 587mChangingDemographicsThe rapid growth and ageing of theglobal population, particularly acutein developed countries has, combinedwith the increasing availability ofadvanced treatments, contributed toincreasing significantly the cost burdenof healthcare on societies.In the Nordic countries, privatehealthcare provision is growing rapidly,which is driving efficiency gains aswell as catering to increasing demandfor private pay solutions. There is abroad landscape of SMEs active inthis field. Also, the Nordic countrieshave a vibrant ecosystem of innovativecompanies active in R&D-drivenhealthcare business models, as wellas in eHealth, which are expected todrive both availability of healthcare andcost efficiency.12Resource EfficiencyTech-Enabled BusinessRapid growth in the global populationcombined with increasing wealthin emerging economies is placingincreasing strain on a finite resourcebase, driving the need for increasinglyefficient production of food, energy andmaterials. The Nordic economies havea strong economic base of companiesfocused on addressing these problems,particularly in the food production,waste and recycling segments.The Nordic region has a large anddynamic ecosystem of innovative techenabled businesses, being the fastestgrowing and most liquid tech marketglobally. It has one of the world’s mostsophisticated online and mobile internetmarketplaces, providing significantopportunity to digitise and ‘tech-enable’traditional business models. This isdemonstrated by 22 % of Nordic SMEsmarketing their products and servicesonline compared to 15% of the EU as awhole.The Nordic countries have alsohistorically been leaders in energyefficiency, due to the presence of alarge traditional energy industry anda strong political opinion in favour ofenvironmental protection. This hascreated a thriving universe of SMEsactive in the sector.The combination of fundamentaleconomic drivers, political will throughthe UN and the Paris Agreement, and arapid pace of technology developmentpresents a significant opportunityfor Nordic companies to deliverproduct and service offerings to meetgrowing demand.The large universe of SMEs and strongpool of management talent has ledto a highly active M&A environment,with more than 1,9 billion investedacross 580 technology transactions in2016 and 2017

via summaVia SummaSumma’s principles for strategy1.The purpose is constant,everything else will change4.The organisation that got ushere, may not get us there2.The impact on society is thedriver of value creation5.Strategy is aboutalignment on priorities3.Improved financial performancewill be the outcome6.The strategy should be agileand enable fast decisionsSumma aspires to be a connector of ideas, capital, resources,and talent to contribute and strengthen a company’s journey.On this journey, we support value creation by shaping a clearpurpose and goals. We then help the company to successfullyfulfil its purpose and reach its goals.We call this processVia SummaPURPOSEGROWTH DRIVERS Why does this company exist? What are the underlyingdrivers of the business thatpositively impact society? Who are the stakeholders weserve, what are their needs?VIASUMMA How can we control andoptimise these drivers?THREE PHASED PLANSORGANISATIONALREQUIREMENTS How can we create a futureproof and high-performingorganisation? What are the enablers in theorganisation and what are thebottlenecks holding it back?TARGETS What are the five-year targetsfor the company? Financial targets Operational targets SDG / ESG targets What does the journey looklike over the next 1-2 years,what could it look likebeyond that? Phase 1: Improve Phase 2: Scale Phase 3: Next waveof growth13

Deal sourcingESG integrationSumma’s deal flow consists both of actively sourced andincoming cases. In addition to performing traditionalESG Due Diligence we also consider which problem thecompany is aiming to solve and potential SDG impact in theinitial stages. The approach differs somewhat for the twodifferent pathways. Incoming deals go through a screeningprocess where we consider the significance of potentialSDG impact before further action is taken. Summa’s focuson using ESG as a value driver aids in this process as wellas in developing each business after acquisition.As a private equity firm Summa Equity seeks to createsuperior future-proof returns by investing in companiespositioned to benefit from global megatrends and createHigh Performing Organisations. The megatrends drive manyof the environmental, social and governance issues that theSDGs seek to highlight, while at the same time presenting uswith opportunities to find novel solutions.When actively sourcing deals we focus on identifying thespecific areas within each investment theme where themegatrends provide room for growth, disruption andpositive influence with respect to global or local issues. Inparticular we look for unique technologies or processesthat significantly improve upon what exists elsewhere inthe respective industry.ESG-considerations, then, are essential to all our investmentdecisions. Whilst the megatrends are set to drive growthand opportunities across a number of sectors, we believethat ESG integration is also valuable as a tool that canbe used to create High Performing Organisations thatare purpose-driven, resilient and do business differentlyto deliver stronger all-round performance. ESG is a coreelement of our approach to identify, screen and manage ourinvestments, in terms of both identifying risks and drivingvalue creation. Unlike many firms, accountability for ESGissues is not delegated to a single function but integratedacross our investment strategy and fundamental analysis.We believe our approach to investing along key themes andintegrating awareness of ESG issues into our investmentdecisions and portfolio management serves to benefit ourinvestors by aligning with global megatrends, generatingfurther value by capitalising on ESG opportunities andprotecting value through reducing and managing risk.ESG INVESTING APPROACHMEGATRENDS1. AgeingDemographicsMegatrend &ESG expertiseIntegrated ESGapproachBoard level ESGgovernance & valuecreation focusFocus on ESGvalue-added2. Movement ofpeople3. Resource Scarcity4. Population GrowthDEALSOURCINGESG DUEDILIGENCEPORTFOLIOMANAGEMENTEXITAPPROACH5. Energy Efficiency& Climate Change6. TechnologyDisruption14Megatrend &ESG expertiseIdentification ofESG risks andopportunitiesHigh PerformanceOrganizationsImproved ROI

esg integrationDetermining materialityFollowing the successful acquisition of each company,Summa undertakes efforts to further integrate ESG issuesinto the ongoing operations. This is initiated throughfacilitated workshops where key stakeholders are identifiedand the material issues determined. Milarex’ materialitymap below shows the outcome of such an assessment. Theissues have been prioritised according the potential degreeof impact on the business, and the likelihood of that impactoccurring. The upper right-hand quadrant contains the morematerial issues. Once identified these issues will allow focuson specific initiatives and processes within Milarex.The materiality assessments serve as a foundation fromwhich we may develop metrics to monitor performance andimprovement going forward, while ensuring that we have aclear view of what is relevant for each industry and track whatis most important.MILAREX MATERIALITY MAPProduct deliveryLIKELIHOOD TOIMPACT ON BUSINESSHealth and safetyFish qualityGreenhouse Gas(GHG) EmissionsWater issuesProduct pricingEmployee payand conditionsFish health(Listeria)Compliance toEU regulationsRetentionof key staffProduct innovationTransportationDEGREE OF IMPACT ON BUSINESSSumma FoundationSumma Equity believes in building strong links withthe communities. Hence, Summa Equity is linkedwith a charitable Foundation to which part offuture returns are allocated. This is integral to thevalues of Summa and is in line with its commitmentto a strong culture of ESG.The main purpose of the Summa Foundationis to promote a prosperous society and ecology.The purpose of the Foundation shall be fulfilled,directly or indirectly, through charitable donations,investments in social, cultural or environmentalenterprises that positively impact an improvedsociety and ecology, or through other ways ofadvancing the Foundation’s purpose.15

sortera case studyValue creation through ESG improvement: SorteraIn 2016, one of Sorteras crushing-machines was becomingoutdated. Sortera’s crushing-machines are crucial inprocessing inbound waste, both breaking down and sortingthe materials. As one of these needed to be upgraded, Sorterachose to invest in a new, fully-electric crusher. Not onlydoes the new machine lead to more efficient waste handlingand eliminate the use of diesel completely; it also reducesdust and sound in the working environment. In addition,it enables Sortera to handle a wider array of waste types,improve the recycling yield and the quality of the recycledmaterial. Sorteras choice reflects one of the core values inour investment thesis – investing into ESG-positive solutionscan both increase productivity and is an economically efficientchoice for companies.ESG goals2017202086% recyclingyield today99% recycling yieldin 2020240 000 tons CO2saved today300 000 tons CO2saved in 2020100% of machineselectric by 2020FINANCIAL IMPACTENVIRONMENTAL IMPACTReduced OPEX fromautomated processesImproved CO2 footprintand higher recycling yieldSOCIAL IMPACTCOST COMPETITIVENESSImproved working environment reduced dust and noiseLargest machine of its kindin Northern Europe (200kT)16

portfolio overviewAcqisition timeline and portfolio SDG alignmentFeb ‘17 – Summa Equity I: Final close at SEK4,7bnDATE OF ENTRYSDG ALIGNMENTJan ‘16Apr ‘16Feb ‘17May ‘17Jul ‘17Apr ‘17Summa DigitalJul ‘17Feb ‘1817

Lin EducationChangingdemographicsA difference that makes a difference for the learnerINVESTMENT tion2017 REVENUERENEWABLE ELECTRICITY 1CARBON FOOTPRINTSEK 565m54%36 147 tonnesNO. OF EMPLOYEES 2% FEMALESTAFF TURNOVER10038%8%SDG ALIGNMENTKPIs200kstudents useLin devicesACTIONSLin Education entered the portfolio early in 2017.Between 2015 and 2017 Lin installed more than 200 000digital tools in schools and preschools with more than40 000 people using the company’s proprietary productsfor learning. In 2017 Lin embarked on a project to defineareas of sustainability where their value proposition couldbe strengthened and also established a team dedicatedto expanding the scope of the device buyback business. Inthe autumn of 2017, Lin released Loops - a collaborativelearning platform for schools and businesses.1812Based on Swedish average.FTE estimate.32kNumber of"buyback"devices2kNumberof Loops

our investmentsLin EducationProviding quality educationLin is a value-added reseller and a trusted pedagogicpartner to Swedish schools with three business units– Solutions, Reuseit and Loops. Solutions is a reseller ofdigital tools with range of administration, insurance, support1,35millionprimary and upper secondaryschool students in Sweden11and pedagogic services. Reuseit is a “buyback” service andresale of used devices to new end-markets. Loops is acollaborative learning platform for schools and businesses.200ktotal number of students with Lin devicesCHALLENGEHOW DO WE IMPROVE?Adapting education systems to the digital age iscumbersome and the transformation has onlyjust begun. Schools need help to find the bestway to deploy new technologies in the classroom.Loops, developed in-house by Lin and launchedlate 2017, is a collaborative learning platformbuilt on formative learning principles togetherwith teachers that allows users in a class orbusiness, big or small, to develop and engagein interactive learning journeys together.HOW DO WE SOLVE IT?VALUE CREATIONLin has developed a complete solution for digitisingthe classroom together with teaching professionalstailored to the needs of school leaders, teachersand students. In addition, Lin helps schoolsmanage the devices throughout the lifecycle aswell as extending the average device life.Lin, through Loops, has developed a digitallearning company that can impact teaching andlearning in organisations all across Sweden.Notably, this can be extended across the world toincrease the reach and subsequent impact.SCB, http://www.scb.se/statistik/ publikationer/uf0527 2009a01 br uf08br0901.pdf19

EgainResourceefficiencyPutting an end to wasted residential energyINVESTMENT THEMELOCATIONSECTORResourceefficiencySwedenEnergy saving2017 REVENUERENEWABLE ELECTRICITYCARBON

care products facilitating for elderly people staying at home, general health care aiming at increasing healthy and productive life years (e.g. medical supplies, eHealth and tools for more efficient health care delivery), employment opportunities for older people, adapting the built environment and transport (e.g. upgrades to public transportation