What are the main factors impacting the discount to net asset value? - A case study of Investor AB

Abstract: The discount to net asset value for investment companies has puzzled both the world of academics as well as the investment companies themselves. This thesis aims to examine how the Swedish investment company Investor AB can combat this market inefficiency by analysing the main factors impacting the discount to net asset value over the time period 2006:M12-2016:M12. A multiple linear regression approach is used in order to find significant factors affecting the discount to net asset value. The final result in this thesis finds a statistically significant negative relationship between the discount to net asset value and Investor’s cash level and debt equity ratio. Positive statistically significant relationships are found for the share of unlisted holdings of the total net asset value of Investor, the company’s costs, and analysts’ ratings of the company.