Okay, thank you, and welcome everyone. I'm sitting here together with the new CFO, Christoffer Abramson. He will take care of some of the presentation today. We start on page number two, which says, "Leading finance group in property and alternative investments," which should be on your screen. I think most of you are probably quite familiar to this one. We have added during the year the fourth squared up which says principal investments, which is becoming more of a core sector in our strategy, and we will come back to that. I think the others you are quite familiar to. We have, during the quarter, lost some assets. We observe here SEK 136 billion. Roughly, it's within the systematic macro which had lost us money. In the property investments, we have grown it by SEK 5 million-SEK 7 million.
Overall, we are growing where we would like to grow. I go to page number three, says, "The results of operation within the Corporate Finance." I think Corporate Finance has performed according to plan or maybe even better given the overall situation. They are working with a positive result for this quarter. They have still a pretty good pipeline. Of course, with the turndown during the last week, it might have an effect. Otherwise, we are quite positive about the outcome of the year. Nothing to worry. I think we are generally improving our market positions in the big markets, like which is Scandinavia and strong. Germany is suffering. We are considering various kind of opportunities, which do not mean that we'll close it down. Actually, the opposite. I go to page number four, which is the Property Investment Management.
The result within this sector is about SEK 92 million or SEK 100 million. Most of that has come from the performance fee from the CPM, which is the Catella Project Management company in Germany. That profit is related to the performance fee from when we sold the Grand Central project in Düsseldorf. In general, we have positive market situation. I would say that all operations within this sector are doing well. We expect to grow it further. We come to equity hedge and fixed income. We sold the mutual fund, as you probably already know. It means a small loss on the consolidated numbers. Overall, I think we are pleased to have it sold. As you know, we have a put option on the remaining SEK 60 million, which is in our balance sheet.
I think the put option is in January 2022 in case we would like to sell it. The numbers are not included in the numbers after the sale of mutual fund. When it comes to systematic macro, they are suffering, and they've had a pretty bad performance. Due to that there have been a lot of withdrawals from the fund. We are taking actions, and I'll come back to that. We come to the Catella principal investments, and that is on page number six. We have in total invested SEK 800 million. Most of that is within the Kaktus Towers project in Copenhagen. After we have sold and dividended out money regarding Grand Central, the investment in Grand Central is. The owner company is called NOZ, Nordic Seed, and most of those 91%. The 91% is our equity part of that group.
Catella owns 45% of the NOZ. When it comes to development project, it's primarily Kaktus. You know that we have the loan portfolio as well, that is being explained somewhere else. I think they are doing okay according to plan. Maybe there are some delays in the clean-up calls from the bank due to the COVID. We had expected to sell, as you might know, the Pastor Two fund during quarter two. It didn't materialize, let's see if they will do the clean-up call in Q4. Overall, pretty stable situation. The project, I think they all look good. I don't think there should be any worries about neither Grand Central. There's nothing left. The Seestadt, which is progressing. Düsseldorf is progressing well. Kaktus is doing well. The Nordship being the logistic property is doing okay as well.
Now, Christoffer, I will leave the consolidated numbers, the group's numbers to you.
Great. Thank you, Johan. We'll switch to page number seven, where, as Johan said, we'll summarize the consolidated results of the group. Overall, the group delivered a really strong quarter with a total income of SEK 744 million, which represents a year-over-year increase of 44%. Despite the challenging environment, we are still ahead of 2019 on a year-to-date basis. Obviously, two significant events had a material impact on the Q3 financials. Johan talked about the Grand Central project in Düsseldorf which has contributed SEK 208 million to net profit, slightly over our prior communications, and SEK 175 million of that comes from our principal investment segment and SEK 33 million from our Property Investment Management, which has project managers project and also received some performance fees due to the exceptional performance of this project. Secondly, we talked about the divestiture of 70% of the mutual funds for SEK 140 million.
That created a Q3 net loss on the P&L of SEK 9 million after selling expenses. The remaining 30% is now recorded as a SEK 60 million holding in an associated company, which is the agreed purchase consideration for our put and call. As Johan said, that is for 2022. If we then go to the assets under management, as Johan said, we have divested the fund, which had, at the time of divestiture, about SEK 20 billion of assets under management. If we adjust for that, the group actually grew its assets by over SEK 7 billion, driven by an exceptional quarter by the Property Investment Management segment, where we had some real key wins with some management of shopping centers in the U.K. and logistics sites across France and a lot of residential investment acquisitions across Europe.
Real strength in some of the core areas that we're focusing our future on. We go to page number eight to cover the balance sheet as of 30th of September. Thereof, I'll explain. This is excluding Catella Bank, which is reported as a disposal group held for sale. Excluding the bank, the group's total assets are about SEK 3.5 billion. As mentioned, the continued focus on principal investments can be seen in the SEK 601 million of assets in property development projects, which includes SEK 91 million of our share of equity in associated companies in the development projects in Germany and SEK 511 million of project investment in the Danish student housing development, Kaktus, which is primarily owned by Catella and thus reported fully on our balance sheet. In that project, we invested an incremental SEK 64 million in the third quarter.
Catella's liquidity remained very strong with about SEK 1.45 billion of cash in equivalent and a solidity around 40%. The third quarter cash flow, again excluding the bank, was SEK 306 million. A lot of that was driven by SEK 173 million from the sale of Grand Central and SEK 83 million from the divestiture of 70% of Catella Mutual Fund. While we're very happy with our strong financial position, it should be noted that not all of the SEK 1.45 billion of cash is immediately available for investment as a large portion is still held in our daughter companies to fund ongoing operations and partner share profits. We'll get to that more, I think, after the year-end.
Once the banking license is returned, we expect to increase our cash balance by some further SEK 400 million, which is indicated in a footnote and at the far right in the graph when we look at our very positive liquidity outlook and the strength for future investments. On that note, I will hand back to Johan to speak a little bit about where we are heading strategically.
In general, I think the market interest for properties and related situations is big. With the low interest rates, you are probably more analytic oriented than I am in the market of macroeconomics. Generally, we see a demand for within the, I'm on page number nine. Maybe you should know that. Sorry, I apologize. I think there is growth in the segment where we are located or where we are focusing. In general, we see demand for our product. Most of our emphasis or our focus will be in the Property Investment, but also a little bit in Corporate Finance. We could move on to the next page, which is the measures and direction, which is on page number 10. You can see to these graphs here, whatever it is.
They're not graphs, but you can see that today we have probably 50% of our existing funds and our assets are within what I would call the core business. A big part of that is residential and offices, and very little in other market segments. Value add, which is segments where we are a little bit more opportunistic, and maybe where we expect returns in the range to investors of maybe 8%-12%. We are not that focused in that segment. In the pure opportunistic segment, which is what Aton maybe, I would say, are focusing, it's not a very big part. If I would picture our future, I would say that we would like to create more verticals.
We would not like to decrease our focus in the core business because that's where most of the German money, and I would say in general, where most of the money is focusing. We think that since we intend to grow and grow by initiating new verticals in new segments, I think maybe the core business will stay being around 50% of our assets under management. You should not see this as a decrease of the core, but actually that we would grow in other segments. I think we have somewhere in the quarterly report said that we will make some kind of, not restructuring, but we will look deeper into how could we grow the growth faster, especially in Germany, since Germany is the biggest property market in Germany, and also where we have a very strong footprint. We think we could do that even better.
In Germany, we have, I would say 95% being in the core business. Maybe that will over time decrease to 75% by a combination of new initiatives, but also a growth in the core business, which is to a high extent the residential segment. Okay. We could go into page number 11. Most of you probably know that we made this co-investment together with a partner in the Nordshiping, which is a logistic site of 70,000 sq m of built. On top of that, we believe that, and I think it has been described somewhere else as well, but we also think it's totally aligned with our strategy to make co-investments or seed capital into new funds or new structures. First, Catella will receive the same kind of return that every other investor will return. That's in the range of 4%-8%.
That's what Catella will receive on that. On top of that, by doing this kind of co-investment, we will probably be able to grow the asset management faster than we would if we didn't do it. By investing 3%-5% on new funds or new structures, we will probably grow the asset management faster. I think everyone today would like to have aligned interest from the party who is responsible for the investment. I think it's totally aligned with our strategy at Catella, which also is being shown that we have a lot of participation or aligned interest from management in the various companies because they could also be dependent on our success. It's a part of the overall that you can tell that you may be connected of what we are doing. Thirdly, we will earn performance fees in these new structures.
On top of the 4%-8% that the fund will generate, we will attract more money, and on top of that, we will have the performance fee while we believe that we could earn, in general, a very good return on the small percentage of investments we will do together with new investors. This is part of the strategy that we would like to build. When it comes to Corporate Finance, we do have a problem in Germany. We will put some focus on that and see how that could be improved. When it comes to equity hedge, the only remaining asset we have in this segment is the systematic macro, which during the last two, three, four years has performed extremely well and generated most of our cash flow. I think that's mainly due to COVID and the new situation in the world.
The world is not 100% systematic anymore. It's very much event-driven. The systematic products have not performed very well, and we are trying to change both the model, but also start a new fund which will be launched early next year to balance the performance of systematic macro. Over time, systematic macro models should perform, but during certain periods when there are political events or other kind of events driving the balances or the macro balances, it's difficult to perform, and we have had problems. The fund is down 10% this year, roughly. Regarding Catella Bank, I think management have done a very good job, not including myself. It includes the management in the bank and especially our HR, who is, so to say, responsible for the bank. Our HR manager, he's also responsible for the bank. I think we are making good progress.
We are not behind the time plan, but there are still some issues in relation to the SSM and the ECB which need to approve the winding down of the bank. On the group level, I'm on page number 12, by the way, we have done some cost savings. You could see it in the numbers. We are still working with trying to decrease the taxes in the group. I don't know if any one of you have seen it, but we have had almost 0% taxes on the sale of the Grand Central, which is due to some kind of tax restructuring which we did during last year, where we, so to say, sold internally part of the shares to another company. By that, we received the capital gain, which is taxed. We couldn't have done that if we had sold the properties this year.
Okay, that was the end. Thank you. Any questions?
Thank you. If you wish to ask an audio question, you may do so by pressing zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Once again, it's zero one on your telephone keypad if you wish to ask an audio question. There'll be a brief pause whilst we wait for questions to be registered. Our first question comes from Patrik Brattelius from ABG. Please go ahead.
Hi. Good morning. Thank you for taking my questions. A couple of questions from my part. If I just start with the fact that you write in the CEO statement that the ongoing transformation to become more property focused is still ongoing. How should we view the equity hedge and fixed income fund segment? Is this non-core from your perspective?
In the long term, yes, I would say. That doesn't answer the question if that is within one year or 10 years. At the moment we are trying to focus on improving the performance and developing new products or elements of the product.
Okay, great. If we continue on with that, you write that the model within systematic macro has been altered and changed. Has that in itself led to any outflows from clients since you have changed the premises on which they invested from the beginning?
No, I would say the opposite. I think so far we have only changed maybe maximum 10%, and probably that will increase up to maybe 20%- 30%. I think most of those changes are being welcomed by the remaining investors, and we are staying close to our customers to make sure that they are aware of what we are doing and that they find that a positive reaction from our side.
Great. The last question regarding this segment is you're working with the cost base, but would you say that systematic macro now is profitable on this AUM base if we were to normalize the cost base?
It's a moving target when it comes to, if you could tell me what total assets would be during next year, I could answer the question. The problem is I don't have any firm opinion on the assets under management for during the next 6 -12 months. I wish I had, but I don't. I think we have taken measures in the systematic macro and are they sufficient? I don't know. We are working with that, and we are reassessing the cost base from month to month.
Okay. If we phrase it like this then, if we keep the AUM base flat and all these cost measurements that you have taken are done and finalized, would the segment be profitable then?
We are taking substantial investments in new products and product development in the order of SEK 30 million, SEK 40 million, SEK 45 million per year. If you exclude those, absolutely. If you include them, it simply comes up. It's not far away.
Yes. Okay. Thank you so much. My next question is regarding the principal investments, where if I remember correctly, Grand Central started in 2015 and is now divested. Looking which one is the second oldest, it looks like it's Seestadt, which started in 2017. How far along are we in this process now? What is left to be done? Is this reasonable to be expected to be the next project to be divested, or is it too big and hence needs a little bit longer time than Grand Central? How should we think about this?
Seestadt is a big project. It is also a big project in Mönchengladbach. What I mean by that is that we cannot do 2,500 apartments in Mönchengladbach at the same time. Just that project is a project of, let's say we have said EUR 500 million -EUR 700 million or EUR 800 million. It is not fully defined yet. It is more or less 15 to 20 different phases, and we are just about to start the new phase, which is less than 10% of the whole project. My take on this is that this will be ongoing for the next 5- 10 years. It does not take a lot of capital, and that is why it is such an attractive investment.
Okay.
Yea. I mean we have in total invested less than SEK 100 million in this project, as you can see from our presentation. These are projects which will take more than EUR 1 billion to invest in this project. I will not disclose everything about the financial structure of it, and there are no secrets there. It's not decided and done and exactly, but I would say that we can do it on quite favorable terms.
Okay. Okay. That's fair. Thank you. I just have two more questions. Looking at the balance sheet now and the cash position and what you expect to be added also when the bank is finally divested, what do you want to do with this? What is the first thing that can be expected as a shareholder that you want to use this money for? Can you also then talk a little bit about the bond of SEK 750 million that you have on your balance sheet? Is that a necessary financing source, or is that something that you're looking into of buying back?
I don't think we should comment on trading in our own bond. We do intend to stem the bond, whether that will be in a lower or bigger amount, we don't know yet, and we don't comment on whether we would try to stem or decide to buy back any of the bonds. I think that's a fair comment, isn't it? We do understand that the short-term return of buying back the bond, that is rather than what we are in the market for our liquidity. I think we know the difference between paying 4% or 5% and earning nothing on our money. I think that's the answer. Is that a good enough answer for you at this stage?
Yeah, I guess so. Are there any grand plans for this massive cash position or is it just small investments or are there M&A targets in, for example, the U.K. which you bought the company a couple of years ago or you want to strengthen your position in Germany in Corporate Finance and that needs a lot of cash or what is the next step for this pile of cash?
We don't have any giant investments from Catella. We are discussing several possible investments, but it's not that we will invest EUR 500 million next year in new equity. That's not on the roadmap today. That could come up. We have had during the years several possibilities to acquire companies or do acquisitions in or joint ventures which we have not due to various factors. I think there might be new opportunities and we want to be prepared for those. On the other hand, if we can see that we could grow our assets faster by doing co-investment should be also be prepared for that.
Okay. That's fair. I just have a final question here and that is where are we at on the search for a new CEO? Is that currently ongoing or is that paused and you will take over as permanent CEO or where are we at in this?
The only thing I can assure you, I will not stepping in as the permanent CEO. I'm probably staying on for the shortest period. There is a transformation going on in the company which has been so good and that these folks are the kind of people that we would like to have on the management level where we would like to have more properly knowledgeable persons with deep understanding of the market. I think what is important for us being. Today, I mean we have almost 90% of our operations outside Sweden and if we are going to be credible and relevant for the structures around Europe, we need to be able to deliver two, three different things. One is competence and deep knowledge of their segments and their business.
We have to be relevant to them so that they believe that we could advise them and support them. The other thing they require is financial support. If they find possibilities, targets, co-investments, whatever, we need to have the necessary funds to be relevant. If we are going to talk to BlackRock about investment, we need to be relevant to BlackRock as well. We are trying to grow our perception in the market, but I think part of that is having a strong balance sheet and having the relevant competence in the structure. It's about people here, but it's also about money and we need to be strong in both aspects, in both segments, people and money.
Okay.
That is my primary target. So far I think I make maybe a small difference, but I think we have a somewhat new direction and I think we have a very motivated team. We had that in the past with the former management as well and they did a good job. I'm not complaining at all. I'm just saying that we are trying to refocus the operation and we try to be closer to our operations. If I was to make any complaints, I think maybe we have been a little bit far away from our operations which is partly why we maybe have failed in certain areas. We need to get closer to the operations, closer to the people and have a direct impact on what they are doing and follow them. We can only do that if we are relevant ourselves. Is that an answer?
Great answer. Yeah. That was all for me and thanks for the new look in the presentations. I like the measures and direction section which you have added. Thanks.
Okay.
Thank you. There appears to be no further questions so I will hand back to the speakers for any other remarks.
I don't have any further comments. I think last time I made the presentation maybe too long. This time I made it too short. Regardless, this is my perception. I think we are in pretty good shape. I think we have a lot of motivated people. We have a much clearer focus. We are trying to enlarge our competence in the property sector. That's what we are trying to do at the moment. I think we have new possibilities coming along, and we have to be open-minded for that. It's a matter of being quick and being relevant.
Okay. On to that point, being quick and relevant, you do need liquid capital for that.
I think that.
The point that we've made about the cash appearing very large on the balance sheet, I think that is a prudent and a smart way to be when you're in the middle of a transformation, so you can take the right opportunities when they come along.
Also in this, speaking of this situation with COVID, we believe there will be opportunities coming along, if we are long-term player in the market. Sometimes I believe that the Swedish or Scandinavian investors underestimate our market position in Germany or in Europe as a whole. I think our growth will not necessarily take place in Sweden. We have a very good Corporate Finance. We are good in the asset management here, and we are setting up new structures in Scandinavia and Sweden. Our growth will try to be focused in continental Europe. Even if SEK 2 billion is a lot of money in Sweden, if we go to Germany, they always assume we are talking Europe. We are not a big fish, but we do want to play with the somewhat bigger fish without being eaten.
Thank you for listening.
Okay. Thanks a lot.
Thank you very much.