Annual Report SEB Private Equity Opportunity Fund III S.C.A., SICAV-SIF

Transcription

1 Annual Report SEB Private Equity Opportunity Fund III S.C.A., SICAV-SIF S CAV S F Status: 31 December 2017 R.C.S B

2 Notice The sole legally binding basis for the purchase of shares of the Partnership described in this report is the latest valid Placement Memorandum with its terms of contract.

3 Table of Contents Pages Organisation 1 General Information 2 Report of the General Partner 3 Schedule of Investments 5 Statement of Operations 6 Statement of Changes in Net Assets 7 Statement of Net Assets 8 Statistical Information 9 Notes to the Financial Statements 11 Audit Report 17 Risk Disclosure (unaudited) 20

4 Organisation Registered Office of the Partnership: SEB Private Equity Opportunity Fund III S.C.A., SICAV-SIF S CAV S F 4, rue Peternelchen L-2370 L 2370 Howald, Luxembourg General Partner and Alternative Investment Fund Manager ( AIFM ): ( A FM"): SEB Private Equity Opportunity III Management S.A. SA. 4, rue Peternelchen L-2370 L 2370 Howald, Luxembourg Board of the General Partner: Chairperson Viveka Hirdman-Ryrberg Hirdman Ryrberg Members Matthias Ewald Jan Stjernström Stjernstrom Lise-Merete Lise Merete Jorgensen (until 15 November 2017) Philippe Racelle (since 15 November 2017) Marcus Wernersson Central Administration (including the Administrative, registrar and transfer agent function) and Paying Agent in Luxxembourg: The Bank of New York Mellon S.A./NV Luxembourg Branch 2-4, rue Eugène Eugene Ruppert L-2453 L 2453 Luxembourg Depositary: Skandinaviska Enskilda Banken S.A. SA. 4, rue Peternelchen L-2370 L 2370 Howald, Luxembourg Investment Advisor: SEB Investment Management AB Stjärntorget Stjérntorget 4 SE 169 SE Solna, Sweden Auditor of the Partnership: PricewaterhouseCoopers Société coopérative 2, rue Gerhard Mercator L-2182 L 2182 Luxembourg 1

5 General Information SEB Private Equity Opportunity Fund III S.C.A., S CAV S F SICAV-SIF (the Partnership ) Partnership") is a société en commandite par actions qualifying incorporated under the laws of the Grand-Duchy Grand Duchy of Luxembourg as a société d investissement à a capital variable fonds d investissement d'investissement spécialisé. The Partnership is subject to the law of 13 February 2007 relating to specialised investment funds, as amended or supplemented from time to time (the 2007 Law ). Law"). The Partnership qualifies as an alternative investment fund ( AIF ) ( A F") within the meaning of the Directive 2011/61/UE on alternative investment fund managers (the AIFMD ) D") as implemented in Luxembourg by the law of 12 July 2013 on alternative investment fund managers (the 2013 Law ). Law"). The Partnership was incorporated on 3 July 2013 for an unlimited duration as a public limited company ( société anonyme ). anonyme"). The Articles of Incorporation were published in the Recueil Spécial des Sociétés et Associations Associations" (hereafter Mémorial C ) C") on 2 October The Articles of Incorporation lastly modified with effect from 2 November 2016 have been published in the Recueil Electronique des Sociétés et Associations (RESA) on 18 November The Partnership is registered with the RCS RC8 under the number B The Partnership is managed by SEB Private Equity Opportunity III Management S.A. (the General Partner /the Partner"/the AIFM ). A FM ). The General Partner has delegated parts of the Central Administration as further detailed hereafter, including the administrative, registrar and transfer agent functions - under its continued responsibility and control - at its own expenses to The Bank of New York Mellon S.A./NV, Luxembourg Branch, 2-4, rue Eugène Eugene Ruppert, L-2453 L 2453 Luxembourg. This company was incorporated in Luxembourg as a société anonyme anonyme" on 15 December 1998 and is an indirect wholly-owned wholly owned subsidiary of The Bank of New York Mellon Corporation. It is registered with the Luxembourg Trade and Companies' Companies Register under Corporate Identity Number B (the Administrative Agent Agent" and Registrar and Transfer Agent ). Agent"). In the capacity of Administrative Agent, it carries out certain administrative duties related to the administration of the Partnership, including the calculation of the NAV of the Shares and the provision of account services for the Partnership. In its capacity as Registrar and Transfer Agent, it will process all subscriptions, redemptions and transfers of shares, and will register these transactions in the Shareholders Shareholders' register of the Partnership. The Partnership will mainly invest in the small to lower mid-market mid market segment in the Nordics, where there is a scope for strategic and operational value creation. The targeted companies will, at the time of acquisition, either be headquartered and/or have most of their revenues in the Nordics, mainly in Sweden (each, a Portfolio Investment ). nvestment"). At present, the following share classes are at the Shareholders disposal: SEB Private Equity Opportunity Fund III S.C.A., S CAV S F SICAV-SIF o investor shares A SEK 0 investor shares B SEK 0 investor shares B EUR The base currency of the Partnership is Swedish Krona. In addition, the Net Asset Value, fact sheets and other informational material is published on the SEB Luxembourg website ( The audited annual reports of the Partnership may be obtained, free of charge at the registered office of the General Partner and on the Website. These reports as well as copies of the Placement Memorandum and the Articles of Association are available, free of charge, at the registered office of the General Partner and on the website. 2

6 Report of the General Partner Dear Shareholders, SEB Private Equity Opportunity III Management S.A. (the General Partner ) Partner") was incorporated 3 July 2013 and organised under the laws of the Grand Duchy of Luxembourg as a Société Anonyme for an unlimited period. The object of the General Partner is to acquire and hold a participation in SEB Private Equity Opportunity Fund III S.C.A S CAV S F SICAV-SIF (the Partnership ), rtnership"), a société d investissement d'investissement à a capital variable-fonds variable fonds d investissement d'investissement spécialisé (SICAV-SIF) (S CAV S F) to be organised as a société en commandite par actions and incorporated under the laws of the Grand Duchy of Luxembourg, and to act as its general partner and sole manager with unlimited liability. The final closing of the Partnership took place on 18 May 2015, with a total size of SEK 2 billion. We greatly appreciate the support from our investors in reaching this target. As of 31 December 2017, the Partnership has invested a total of approximately SEK 811 million in five platform investments: Norcospectra, Norvatek, Accedo, Tawi and Soluno. Further, subsequent to year-end year end the Partnership closed the acquisition of its sixth s platform investment in VaccinDirekt.. Accedo Accedo was acquired in June 2016 and is the third investment in SEB Private Equity Opportunity III. Founded in 2004 by two Swedish entrepreneurs, Accedo is a leading player in the rapidly growing and evolving over-the-top over the top (OTT) TV & video space which focuses on the user experience and interface. The company offers a set of products which act as the engine and control system that quickly deploy and manage a user interface. This enables video services across multiple platforms and geographies. In addition, Accedo provides professional services to build tailor made user interfaces according to client needs. With the add-on add on acquisition of Digiflare in November 2016, Accedo established its market-leading market leading position in the US. As part of the company s ongoing transition to becoming a product-led product led company, Accedo launched Accedo One in Accedo One is a new cloud based video experience platform providing a building-block building block approach that enables video service providers to choose the features and components best suited to their particular requirements. Additionally, Accedo secured new alliances with strategic partners such as Google and Comcast. Norcospectra Norcospectra, formerly Norco Spectra Group, was founded by the simultaneous acquisition of Swedish company Spectra Collection AB and Norwegian company Norco AS in February The company provides tailor made tailor-made interior decoration solutions to retailers such as IKEA, H&M, Gant and Peak Performance and is considered to be among the top suppliers in the market. Norco and Spectra pose an interesting combination based on sound industrial logic due to complementary features in terms of market presence, client base and production capabilities. During the year, the successful add-on add on acquisition of KS Projekt was completed which lead to new customer additions and exciting projects. KS Projekt offers concept development, project management as well as turnkey retail solutions and furnishing concepts in commercial environments to a strong client base in Sweden and Germany. On the back of a strong macro-economic macro economic climate, Norcospectra experienced a strong increase in customer orders in Sweden and Poland recovering both volumes and sales. A transfer of production volumes from the Swedish production plant to the newly built Polish wood plant was initiated in 2017 and will continue going forward. Norvatek Norvatek was acquired in October 2014 as a carve-out carve out of three different entities from the larger S:t Eriks Group, a Swedish manufacturer of concrete products. In 2016, Norvatek also acquired Wåge, Wage, the pump station business of Grundfos (pump manufacturer) and, in 2017, Elva ProcessAutomation (including the subsidiary Emendo). Norvatek Group provides solutions to the water and sewage infrastructure market. The company covers the main parts of the water and sewage infrastructure and all major geographies in Sweden. The key competitive advantage of Norvatek is knowledge and experience, which is marketed in the form of services and consultancy, project management and prefabricated turnkey products. 3

7 Norvatek (continued) Since acquisition, Norvatek has experienced significant strategic and operational development, including recruiting the management team, implementing the new organisation structure, moving production in Gothenburg, improving production in Ettebro and establishing the sales office in Mälardalen. Malardalen. In the fall of 2017, Norvatek acquired Elva, a company established in 2006 to deliver technical engineering services focused on water and sewage. Elva develops solutions in the form of consultancy services. In many cases, Elva leads the actual construction with the help of subcontractors, primarily in water treatment plants. Emendo was also included in the acquisition. It is a subsidiary of Elva, selling small water treatment plants. The strategic and operational initiatives has led to strong sales and profitability in 2017 with all units delivering good performance and increasing market shares both in current strongholds - west and south of Sweden - as well as in the Mälardalen Malardalen area. Tawi The Partnership acquired Tawi in December Tawi is a leading provider of complete light lifting solutions comprising vacuum and electric lifters as well as crane systems and aftermarket services. Tawi caters to customers in various industries, with the largest customer segments being Food & Beverage and Pharmaceutical. Since acquisition in December 2016, Tawi has had continued strong momentum in sales with organic growth reaching double-digits double digits in Sales development has been strong across all key markets with continued robust underlying demand. Tawi is still experiencing unmet demand in several key markets which underpins sustainable organic growth outlook. Tawi has been very active in 2017: investing in the salesforce and recruiting several key central functions, as well as investing in developing new products and upgrading existing products. In May 2017 Tawi signed an agreement to acquire the Canadian distributor in line with Tawi s acquisition agenda to acquire key distributors in strategically important markets. Besides the investments stated above, a number of measures were taken in 2017 to introduce new processes and structures across the organisation to build structural capital and to be able to scale the company going forward. Soluno Soluno was created in early 2017 through a merger of Solus Business Communications AB and Uno Telefoni AB the two biggest operator-independent operator independent B2B cloud-based cloud based system-integrators system integrators and providers of high-end high end telephony communication applications in Sweden. The combined company is one of the few market players in Sweden offering fully integrated cloud-based cloud based communications solutions with all the large Swedish operators such as Telia, Tele2, Telenor, 3 and TDC. Soluno s approximately 60 full-time full time employees are located in offices in Stockholm and Gothenburg with operations in Sweden and Denmark. Soluno s Soluno's management has focused on integrating the company without losing growth momentum in One key activity has been to form the management team and organisation as well as communicate the merger internally to staff and externally to partners. Additionally, management has initiated several strategic initiatives to develop and grow the business further. The company met an important milestone in the autumn of 2017 when it surpassed 100,000 users this indicates a gain of more than 30,000 users over the year. VaccinDirekt In January 2018, the Partnership closed the acquisition of VaccinDirekt and its subsidiaries. VaccinDirekt is one of the leading vaccination clinics chain in Sweden. The company administers over 170,000 vaccinations and serves 111,000 clients of all ages annually. The vaccination chain has been created through several acquisitions and currently consists of six clinics in Stockholm, Uppsala and Malmö. Malmé. Additionally, VaccinDirekt operates three mobile clinics. Headquartered in Stockholm, the company employs about 26 full time employees and nearly 80 people on staff during peak periods. Strategy going forward The Partnership s Partnership's pipeline of investment opportunities continued to be strong in 2017, consisting of a good mix of new platform opportunities and add-ons add ons for our existing portfolio companies. The Partnership s Partnership's current six platform investments currently consist of 15 investments in total. Approximately 70 investment cases have been reviewed by the team in 2017, of which approximately. 20 are currently active. Luxembourg, 22 June 2018 SEB Private Equity Opportunity III Ill Management S.A. General Partner 4

8 Schedule of Investments As at 31 December 2017 SEB Private Equity Opportunity Fund III Ill $.C.A., S.C.A., SICAV-SIF Market value in % of Security description Note Maturity SEK net assets Direct Investments Sweden Accedo ** 2 373,293, Norcospectra *** 2 114,399, Norvatek **** 2 206,940, Soluno ***** 2 179,780, Tawi ****** 2I\)I\)I\)I\)I\) 195,497, Total Sweden 1,069,911, Total Direct Investments 1,069,911, Total Portfolio 1,069,911, Cash at banks Cash at banks 70,720, Total cash at banks 70,720, Other net assets Loan receivable 11,248, ,248, Other net liabilities Professional fees -99, , Total other liabilities -99, Forward foreign exchange contracts 7 Buy 9,726, (SEK) Sell 973, (EUR) * 19/01/2018 Buy 11,946, (EUR) Sell 113,558, (SEK) * 161, /03/2018 Buy 544, (EUR) Sell 5,400, (SEK) * 3,720, /03/ , Buy 973, (EUR) Sell 9,727, (SEK) * 53, /03/ , , Total forward foreign exchange contracts (total net unrealised) 3,662, Total net assets as at 31 December ,155,442, * Counterparty - Skandinaviska Enskilda Banken S.A. ** No N0 accrued interest is included *** Including SEK 13,526,073 of capitalised accrued interest **** Including SEK 4,848,562 of capitalised accrued interest ***** No accrued interest is included ****** Including SEK 4,438,832 of capitalised accrued interest The accompanying notes are an integral part of these financial statements. 5

9 Statement of Operations For the year ended 31 December 2017 SEB Private Equity Opportunity Fund III Ill $.C.A., S.C.A., SICAV-SIF SEK Income Income from investments (note 2) 12,030, Total income 12,030, Expenses Bank interest on cash accounts 108, Management fee (note 4) 39,108, Taxe d'abonnement (note 6) 106, Professional fees 712, Broken deals fees (note 5) 368, Other expenses 274, Total expenses 40,679, Net loss for the year (28,649,285.79) The accompanying notes are an integral part of these financial statements. 6

10 Statement of Changes in Net Assets For the year ended 31 December 2017 SEB Private Equity Opportunity Fund III Ill $.C.A., S.C.A., SICAV-SIF SEK Net assets at the beginning of the year 774,699, (28,649,285.79) Net loss for the year (28,649,285.79) Net realised gain: - foreign exchange transactions 5,420, Total net realised gain 5,420, Net realised loss: - forward foreign exchange contracts (2,415,444.43) (2,415,444_43) Total net realised loss (2,415,444.43) (2,415,444.43) Change in net unrealised appreciation on: - investments 248,912, forward foreign exchange contracts 3,877, Total change in net unrealised appreciation 252,789, Change in net unrealised depreciation on: - investments (46,617,990.51) - foreign exchange transactions (1,700,949.99) (1,7oo,949_99) Total change in net unrealised depreciation (48,318,940.50) (48,318,940.50) 178,826, Increase in net assets as a result of operations 178,826, ,917, Proceeds on issues of shares (note 8) 201,917, Total net assets as at 31 December ,155,442, The accompanying notes are an integral part of these financial statements. 7

11 Statement of Net Assets As at 31 December 2017 SEB Private Equity Opportunity Fund III Ill $.C.A., S.C.A., SICAV-SIF SEK Assets Portfolio at cost 811,445, Unrealised appreciation 258,466, Portfolio at market value (note 1) 1,069,911, Cash at banks 70,720, Loan receivable (note 3) 11,248, Unrealised appreciation on forward foreign exchange contracts (note 7) 3,882, Total assets 1,155,762, Liabilities Professional fees (99,854.33) Unrealised depreciation on forward foreign exchange contracts (note 7) (219,925.08) Total liabilities (319,779.41) (319,779.41) Total net assets as at 31 December ,155,442, "A SEK" investor shares outstanding as at 31 December , "B SEK" investor shares outstanding as at 31 December , "B EUR" investor shares outstanding as at 31 December , General Partner shares outstanding as at 31 December Participating shares outstanding as at 31 December Net asset value per "A SEK" investor share as at 31 December 2017 Net asset value per "B SEK" investor share as at 31 December 2017 Net asset value per "B EUR" EUR investor share as at 31 December 2017 Net asset value per General Partner share as at 31 December 2017 Net asset value per Participating share as at 31 December , (SEK) 10, (SEK) 10, (SEK) (EUR) (SEK) (SEK) (SEK) The accompanying notes are an integral part of these financial statements. 8

12 Statistical Information (Unaudited) As at 31 December 2017 SEB Private Equity Opportunity Fund III Ill $.C.A., S.C.A., SICAV-SIF SEK Number of "A SEK" investor shares outstanding as at 31 December , as at 31 December , as at 31 December , Number of "B SEK" investor shares outstanding as at 31 December , as at 31 December , as at 31 December , Number of "B EUR" investor shares outstanding as at 31 December , as at 31 December , as at 31 December , Number of General Partner shares outstanding as at 31 December as at 31 December as at 31 December Number of Participating shares outstanding as at 31 December as at 31 December as at 31 December Total net assets as at 31 December ,155,442, as at 31 December ,699, as at 31 December ,597, Net asset value per "A SEK" investor share as at 31 December 2017 as at 31 December 2016 as at 31 December 2015 Net asset value per "B SEK" investor share as at 31 December 2017 as at 31 December 2016 as at 31 December 2015 Net asset value per "B EUR" investor share as at 31 December 2017 as at 31 December 2016 as at 31 December 2015 Net asset value per General Partner share as at 31 December 2017 as at 31 December 2016 as at 31 December (sek) 10, (SEK) 8, (SEK) (sek) 10, (SEK) (sek) (sek) 10, (SEK) 8, , (SEK) (sek) 10, (SEK) (sek) (EUR) (EUR) (EUR) 1, (EUR) (EUR) (sek) (SEK) (SEK) (sek) (SEK) (sek) The accompanying notes are an integral part of these financial statements. 9

13 Statistical Information (Unaudited) (continued) As at 31 December 2017 SEK Net asset value per Participating share as at 31 December 2017 as at 31 December 2016 as at 31 December (SEK) (SEK) (SEK) The accompanying notes are an integral part of these financial statements. 10

14 Notes to the Financial Statements As at 31 December 2017 Note 1. Significant Accounting Policies The financial statements are expressed in SEK and have been prepared in accordance with the amended Law of 13 February 2007 relating to specialised investment funds and with Luxembourg regulations relating to Undertakings for Collective Investments. Accounting policies and valuation rules are, besides the ones laid down by the applicable laws, determined and applied by the General Partner. The preparation of financial statements in accordance with such principles requires the use of estimates and assumptions that affect the reported amounts and disclosures. Although these estimates are based on management s best knowledge of current events and actions, actual results may ultimately differ from those estimates. In accordance with Article 52 (5) of the 2007 Law, the Partnership is exempt from the obligation to draw up consolidated accounts and a consolidated General Partner report for the year ended 31 December Therefore, in accordance with the legal provisions, these financial statements were presented on a non-consolidated non consolidated basis. Investments: a) Money market instruments, which are officially listed on a stock exchange, are valued at the last available price. b) Money market instruments, which are not officially listed on a stock exchange, but which are traded on another regulated market are valued at a price no lower than the bid price and no higher than the ask price at the time of the valuation and at which the General Partner considers to be an appropriate market price. c) Money market instruments quoted or traded on several markets are valued on the basis of the last available price of the principal market for the money market instruments in question, unless these prices are not representative. d) Forward foreign exchange contracts are valued at the forward exchange rate applicable at year-end. year end. e) Investments in private equity securities are appraised at fair value under the direction of the General Partner in accordance with appropriate professional standards, such as, for example, and without limitation, the International Private Equity and Venture Capital Valuation Guidelines published by the Invest Europe in effect as of the relevant Valuation Day. The valuation of private equity investments requires significant judgment and interpretation due to the absence of quoted market values, inherent lack of liquidity and the long term nature of such investments. Because of the inherent uncertainty associated with the valuation of such investments and the absence of a liquid market, the estimated fair value may ultimately from their realisable values, and the difference could be material. Results on sales of securities are determined by the average cost method. Other assets: The value of any cash on hand or on deposit, bills and demand notes and accounts receivable, prepaid expenses, cash dividends and interest declared or accrued and not yet received is deemed to be the full amount thereof, unless in any case the same is likely to be paid or received in full, in which case the value thereof is arrived at after making such discount as may be considered appropriate in such case to reflect the true value thereof. Currency translation: Transactions denominated in a currency other than the accounting currency are recorded on the basis of exchange rates prevailing on the date they occur or accrue to the Partnership. Assets and liabilities, expressed in a currency other than the Partnership s Partnership's currency, are translated on the basis of exchange rates ruling at the balance sheet date. 11

15 Note 1. Significant Accounting Policies (continued) Currency translation (continued): As at 31 December 2017, the exchange rate was as follows: 1 SEK = O EUR Income: Dividends are recorded on the ex-dividend ex dividend date. Interest is recognised on an accrual basis. Note 2. Direct Investments The following table shows the details of the Partnership s direct investments: Interest Interest Amount Type Maturity Rate Currency Receivable Invested Fair Value Accedo Share capital Common shares (n.a.) (n.a.) SEK (n.a.) 303,387, ,293, Total - 303,387, ,293, Norcospectra Shareholder loan Promissory note 28/02/ % SEK 12,896, ,876, ,772, Shareholder loan Promissory note 28/02/ % SEK 629, ,747, ,377, Share capital Common shares (n.a.) (n.a.) SEK (n.a.) 51,111, ,249, Total 13,526, ,735, ,399, Norvatek Shareholder loan Promissory note 31/10/ % SEK 4,848, ,058, ,906, Share capital Common shares (n.a.) (n.a.) SEK (n.a.) 60,174, ,033, Total 4,848, ,233, ,940, Soluno Share capital Common shares (n.a.) (n.a.) (n.a) SEK (n.a.) 139,676, ,780, Total - 139,676, ,780, Tawi Shareholder loan Promissory note 31/10/ % SEK 4,438, ,864, ,303, Share capital Common shares (n.a.) (n.a.) SEK (n.a.) 114,549, ,194, Total 4,438, ,413, ,497, Total 22,813, ,445, ,069,911, Note 3. Loan receivable The following table shows the details of the Partnership s short-term short term bridge financing: Interest Interest Type Maturity Rate Currency Receivable Nominal Fair Value Accedo Short term bridge financing Promissory note On demand 6.00% SEK 58, ,927, ,985, Norcospectra Short term bridge financing Promissory note On demand 5.52% SEK 262, ,000, ,262, Total 11,248,

16 Note 4. Management Fee In payment of its services, the General Partner receives an annual management fee (the Management Fee ), Fee"), paid half-yearly half yearly in advance by the Partnership to the General Partner or its designee. During the Investment Period, such management fee shall be equal to two percent (2%) per annum of the amount of the Aggregate Commitments relating to Investors Shares; provided however, that the Commitments of any Defaulting Investor shall be excluded from the calculation of Management Fee during the Investment Period. After the end of the Investment Period, the Management Fee will be equal to two percent (2%) per annum of the lesser of (i) the Net Asset Value of the Investors Shares, and (ii) the aggregate cost basis of investments then held in the portfolio and allocated to the Investors Shares minus the cost basis of Portfolio Investments written off allocated to such Investors Shares. No Management Fee shall accrue and be charged for any period prior to the First Draw Down Date. The Participating Shares shall bear no Management Fee. An initial one-off one off management fee equal to one percent (1%) of the Aggregate Commitments for Investors Shares shall be charged by the General Partner and borne by the Partnership, as a compensation for the project organisation and management services provided to the Partnership in its initial phase, to bring the project to completion and launch the investment activities of the Partnership. This initial one-off one off management fee is payable on or about the Initial Closing or any Subsequent Closing, upon capital calls being funded by the Investors in connection with any such Closing(s). Organisational expenses actually incurred and/or borne by the Partnership directly in compliance with and subject to the limitations foreseen by Luxembourg laws and regulations, shall however be deducted from the above mentioned one percent (1%) initial one-off one off management fee payable to the General Partner involved in the management of the project in its preliminary phase, in order to ensure that the total charge for the Partnership in this context is limited to one percent (1%) of the Commitments relating to Investors Shares. These charges shall be amortised - to the extent permitted by Luxembourg laws and regulations - over a period not exceeding five (5) years as of the incorporation of the Partnership, in accordance with Lux GAAP. There were no organisational expenses amortised as at 31 December Any organisational expenses exceeding the aforementioned cap shall be borne by the General Partner. Note 5. Broken deal fees Broken deal fees cover payments to lawyers and other parties over a deal that fails to reach a successful close. Note 6. Taxes The Partnership is liable in Luxembourg to a subscription tax ( taxe d'abonnement ) d'abonnement") of 0.01% per annum of its NAV, such tax being payable quarterly on the basis of the value of the aggregate net assets of the Partnership at the end of the relevant calendar quarter. Investments by a fund in shares or units of another Luxembourg Undertakings for Collective Investment which are also subject to the taxe d abonnement d'abonnement are excluded from the NAV of the Partnership serving as basis for the calculation of this tax to be paid by the Partnership. No stamp duty or other tax is payable in Luxembourg on the issue of shares. Interest, dividend and other income realised by the Partnership on the sale of securities of non-luxembourg non Luxembourg issuers, may be subject to withholding and other taxes levied by the jurisdictions in which the income is sourced. Note 7. Forward foreign exchange contracts Forward foreign exchange contracts are valued at the forward rate applicable at the statement of net sssets date for the remaining period until maturity. Gains or losses resulting from forward foreign exchange contracts are recognised in the statement of changes in net assets. The General Partner may decide from time to time to hedge the currency risks attached to the Share Classes denominated in euro (EUR), in order to seek to limit exposure to currency movements between the Partnership s Partnership's reference currency and the share classes denominated in euro (EUR). The hedging strategy decided by the General Partner shall be limited to the covering of the portion of the funded capital relating to Investors Shares denominated in euro (EUR). Such hedging strategy decided by the General Partner shall be implemented by entering into hedging transactions for and at the time of each draw down relating to such Investors Shares denominated in euro (EUR). All gains and losses are borne by the shareholders of the respective currency hedged share classes. 13

17 Note 8. Capital As at year end, the capital of the Partnership is represented as follows: Commitment Funded Capital Unfunded Capital Number of units issued SEK SEK SEK SEB Private Equity Opportunity Fund III S.C.A., Opportunity Fund SICAV-SIF - Class A SEK capitalisation shares 300,000, ,262, ,737,049 17, SEB Private Equity Opportunity Fund III S.C.A., Opportun.ity.Fun_d SICAV-SIF - Class B SEK capitalisation shares SEB Private Equity Opportunity Fund III S.C.A., SICAV-SIF - Class A EUR capitalisation shares 1,372,300, _ 760,542, ,757,831-78, SEB Private Equity Opportunity Fund III S.C.A., Opportunity Fund SICAV-SIF - Class B EUR capitalisation shares 261,189, ,543, ,645,958 16, SEB Private Equity Opportunity Fund III S.C.A., SICAV-SIF F - General Partner shares 1,0001 1, SEB Private Equity Opportunity Fund III S.C.A., SICAV-SIF F - Participating shares Total 409, ,933,899, ,000 1,065,758, ,140, , Skandinaviska Enskilda Banken AB has committed to subscribe on behalf of the Shareholders for shares of the Partnership for a total amount of SEK 1,933,899,554 (the committed capital) of which SEK 868,140,838 is unfunded as at 31 December The SEK equivalent of the EUR commitment is converted to SEK at a rate of 1 EUR = This is the EUR SEK rate at the Partnership s first closing on 26 November This rate is used to lock in in" any EUR commitments into SEK, and any gains/losses are then allocated to investors at a ratio of their SEK equivalent committed capital. The Investment Manager regularly monitors and reviews paid in capital to ensure that no investor pays more than 100% of their local currency committed capital. Note 9. Changes in portfolio composition A list of changes in the Portfolio composition during the financial period is available, free of charge, from SEB Private Equity Opportunity III Management S.A.. Note 10. Transaction Fees Transaction fees incurred by the Partnership relating to the purchase or sale of money market instruments, derivatives or other eligible assets are mainly composed of Depositary fees and broker fees. Most of the transaction fees are included in the transaction price used to calculate the realised and unrealised gain/(loss) on securities. Transaction costs incurred for a new investment are directly included in the investment cost. For the year ended 31 December 2017, there were no transaction fees incurred by the Partnership. Note 11. Distributions The Partnership will not be required to make any cash distributions to the Investors prior to the end of the Investment Period in cases where cash is returned to the Partnership within eighteen (18) months of the initial investment in the relevant Portfolio Investment and such amounts shall be available for reinvestments. The General Partner may however, in its sole discretion, elect to distribute cash to the Investors prior to the end of the Investment Period. In cases where cash is returned to the Partnership within eighteen (18) months of the initial investment in the relevant Portfolio Investment and the General Partner elects to distribute such returned amounts to Investors, the amounts so distributed will increase the unfunded portion of each Investors Commitment pro-rata pro rata and as a result be available for further draw-down draw down within the Commitment Period. Cash receipts to be distributed to the Investors or reinvested prior to the end of the Investment Period may, pending such distribution or reinvestment, be invested in money market investments or equivalent thereof. 14

18 Note 11. Distributions (continued) The General Partner will distribute income and divestment proceeds after the deduction of the appropriate fees and operating expenses (including contingent liabilities) (in each case calculated separately with respect to Investors Shares issued on the same issue date), in the following order and priority: a) first, to each holder of Investors Shares, pro rata based on the ratio of its current shareholding of Investors Shares to the total outstanding Investor Shares, until each such holder receives an amount equal to (i) its aggregate Capital Contributions at the date of such distribution and (ii) a preferred return of eight percent (8%) per annum (compounded annually in arrears on the basis of a 365-day 365 day year) of its aggregate Capital Contributions from the date on which each such Capital Contribution was made to the date on which it was repaid (the Preferred Return ); Return"); b) second, one hundred percent (100%) to the holders of Participating Shares, until each holder of Participating Shares receives an amount equal to the subscription price of the Participating Shares plus fifteen percent (15%) of the aggregate distributions made under this clause and sub-clause sub clause (a) (ii) above for Investors Shares A and twenty percent (20%) of the aggregate distributions made under this clause and sub-clause sub clause (a) (ii) above for Investors Shares B (the Catch-Up ); "Catch Up"); and c) third, (i) eighty-five eighty five percent (85%) of all further distributions relating to the assets value of the Partnership allocated to Investors Shares A shall be distributed to the holders of the Investors Shares A, pro rata based on each such holder s holder's ratio of current shareholding of Investors Shares A to the total outstanding Investor Shares, (ii) eighty percent (80%) of all further distributions relating to the assets value of the Partnership allocated to Investors Shares B shall be distributed to the holders of the Investors Shares B, pro rata based on each such holder s holder's ratio of current shareholding of Investors Shares B to the total outstanding Investor Shares and (iii) the remaining fifteen percent (15%) of further distributions relating to the assets value of the Partnership allocated to Investors Shares A and the remaining twenty percent (20%) of further distributions relating to the assets value of the Partnership allocated to Investors Shares B shall be distributed to the holders of the Participating Shares, pro rata based on each such holder s holder's ratio of current shareholding of Participating Shares to the total outstanding Participating Shares (the distribution rights attaching to the Participating Shares pursuant to sub-clauses sub clauses (b) and (c)(ii) above, the Special "Special Return ). Return"). In the event of the issue of Removal Promissory Notes (as defined in the Partnership s Partnership's prospectus), the replacement general partner or its designee holding new Participating Shares will only be entitled to receive the payment of a Special Return as reduced by the amounts to be allocated to such Removal Promissory Notes. Distributions may be made by means of annual dividends and interim dividends to the extent feasible as well as by the redemption of Shares or the allocation of the Partnership s Partnership's liquidation proceeds, as the case may be. In any event, no distribution may be made if, as a result, the Net Asset Value of the Partnership would fall below the equivalent in SEK of one million two hundred and fifty thousand euro (EUR 1,250,000), except if the Partnership is in liquidation. As at 31 December 2017, no carried interest provision is estimated to exist for the Partnership by Management. Note 12. Depositary Under a Depositary Agreement effective as of 2 November 2016, Skandinaviska Enskilda Banken S.A. (in such capacity, the Depositary ), "Depositary"), a wholly-owned wholly owned subsidiary of Skandinaviska Enskilda Banken AB (publ), has undertaken to provide depositary and custody services for the Partnership s Partnership's assets. Skandinaviska Enskilda Banken S.A., with registered office at 4 rue Peternelchen, L Howald, Grand Duchy of Luxembourg, is a Société Anonyme created under Luxembourg law to carry out banking activities such as depositary activities. The Depositary is responsible for (i) the custody of all financial instruments of the Partnership and (ii) the verification of ownership of other assets of the Partnership as well as (iii) the monitoring of the cash of the Partnership and (iv) such additional oversight functions as set out under article 19, paragraph 9 of the 2013 Law. The Depositary is entitled to receive a fee of 0.04 per cent per annum, calculated daily on the total net assets value of the Partnership and payable monthly in arrears. 15

19 Note 13. Guarantees As at year end, the following guarantees were in place: Type Counterparty 1 Counterparty 2 Amount Currency Contract Date Maturity Date (Guarantee/Bridge (Guafantee/Blidge (Company) (Bank or other) Loan) Guarantee Accedo Nordea -26,360, ,360, SEK 25/08/ /10/2018 Guarantee Norvatek Elva -16,500, ,500, SEK 08/11/ /10/2019 The Partnership stands as a guarantor on behalf of Accedo for a loan that Accedo has to pay to Nordea. The Partnership also stands as a guarantor on behalf of Norvatek for the outstanding commitment of Norvatek towards Elva ProcessAutomation. Note 14. Significant Events during the year During the year ended 31 December 2017, the Partnership completed the acquisition and simultaneous merger of Solus Business Communications AB and Uno Telefoni AB, consequently forming the new group Soluno. The combined company is the largest operator-independent operator independent B2B cloud-based cloud based system-integrator system integrator and provider of high-end high end telephony communication applications in Sweden. Soluno is among the few market players in Sweden offering fully integrated cloud-based cloud based communications solutions to all the large Swedish operators. Note 15. Subsequent Events after the year end. The Partnership completed its sixth platform investment by acquiring VaccinDirekt i Sverige AB and its subsidiaries ("VaccinDirekt"). The Partnership acquired Vaccindireckt on 25 January 2018 for SEK 85,590, The transaction closed on 26 January The following guarantee was entered into subsequent to year end; Type Counterparty 1 Counterparty 2 Amount Currency Contract Date Maturity Date (Guarantee/Bridge (euafantee/bfidge (Company) (Bank or other) Loan) Undertaking Soluno SHS -17,702, ,702, SEK 25/01/ /12/2019 The Partnership stands as a guarantor on behalf of Soluno for the outstanding commitment of Soluno towards Mitel. There are no other subsequent events after the year end 16

20 Audit report To the Shareholders of SEB Private Equity Opportunity Fund III S.C.A., SICAV-SIF Our opinion In our opinion, the accompanying financial statements give a true and fair view of the financial position of SEB Private Equity Opportunity Fund III S.C.A., SICAV-SIF (the Fund ) as at 31 December 2017, and of the results of its operations and changes in its net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements. What we have audited The Fund s financial statements comprise: the statement of net assets as at 31 December 2017; the schedule of investments as at 31 December 2017; the statement of operations and the statement of changes in net assets for the year then ended; and the notes to the financial statements, which include a summary of significant accounting policies. Basis for opinion We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession (Law of 23 July 2016) and with International Standards on Auditing (ISAs) as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier (CSSF). Our responsibilities under those Law and standards are further described in the Responsibilities of the Réviseur d entreprises agréé for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We are independent of the Fund in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the financial statements. We have fulfilled our other ethical responsibilities under those ethical requirements. Other information The General Partner is responsible for the other information. The other information comprises the information stated in the annual report but does not include the financial statements and our audit report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. PricewaterhouseCoopers, Société coopérative, 2 rue Gerhard Mercator, B.P. 1443, L-1014 Luxembourg T : , F : , Cabinet de révision agréé. Expert-comptable (autorisation gouvernementale n ) R.C.S. Luxembourg B TVA LU

21 _I pwc In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities ofthe General Partnerfor thefinancial statements The General Partner is responsible for the preparation and fair presentation of the financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation ofthe financial statements, and for such internal control as the General Partner determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the General Partner is responsible for assessing the Fund s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the General Partner either intends to liquidate the Fund or to cease operations, or has no realistic alternative but to do so. Responsibilities ofthe Réviseur d entreprises agréé for the audit of thefinancial statements The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: 0 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; 0 obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund s Funds internal control; 0 evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the General Partner; 18

22 pwc 0 conclude on the appropriateness ofthe General Partner's use ofthe going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit report. However, future events or conditions may cause the Fund to cease to continue as a going concern; 0 evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Pricewaterhousecoopers, Société coopérative Luxembourg, 22 June 2018 Represented by Johan Blaise om 19