Comments by the Chairman of the Board

In addition to decisions on new investments, the work carried out by Fouriertransform’s Board in 2010 has been characterized by two main focuses: the investment process and work on adding value. During the financial year investments in nine companies were approved, and as a result we had an investment portfolio of ten companies in total at year end. Most of these are in an early phase of their technical and business development.

Nearly 40 years’ experience of venture capital has taught me that the initial investments must be made at an early stage. The reason is that in the early stages of their development companies rarely succeed in keeping to their schedules, which means that a long time horizon – often of around ten years or more – is called for. There are also greater risks associated with investments at early stages and the role of owner generally required significant input and costs. This gives rise to the necessity of moving on in the longer term by balancing the portfolio with investments in more mature companies.

A significant part of the work of the Board over the year was therefore devoted to carving out a detailed strategy for the investment process. Going forward, our strategic focus will be on companies at somewhat later stages of development, with an investment horizon of between three and eight years. This focus is also in line with the task we have been given by the government, our owner, which demands a return in the longer term.

Our other major initiative involved work on adding value; in other words, how we can best contribute to developing value in our portfolio companies. If the companies are to become successful it is vital that their boards are optimally composed with a tailored combination of personal qualities, expertise and qualifications, and this must be viewed in relation to the executive management of the companies.

Consequently, the CEO and I have worked intensively on as¬sessing and engaging directors from the right backgrounds in various areas of Swedish industry. By early 2011 we had 15 highly qualified external members in place or on their way to the portfolio companies, and I am pleased to say that these included a relatively high proportion of women.

In so doing we have also been able to bring together and establish a dynamic dialog between Fouriertransform’s representatives on the boards of the portfolio companies and Fouriertransform’s own Board of Directors and employees. A first meeting of this type took place in the fall, and similar activities will continue in the future with a view to continual exchange of professional experience.

Fouriertransform performs an important function in the Swedish automotive industry, particularly since it is felt that venture capital companies are demonstrating very little interest in the automotive industry at present. We believe that the path we have staked out for ourselves can provide the right conditions for adding value to the companies in which we are a shareholder, and of course also to future investments.

Lars-Olof Gustavsson
Chairman of the Board