Issue 1, 2020

This issue of the Nordic Fund Selection Journal covers significant developments and trends in the Nordic investment landscape, with a particular focus on ESG integration, sustainable investment products, pension fund strategies, and leadership changes within the industry. Key discussions revolve around the evolving regulatory environment, notably in Sweden's premium pension system reforms, and the Danish pension sector's initiative to launch green pension products addressing climate change concerns. Asset owners are increasingly emphasizing responsible investment practices, with examples including Finland’s central bank signing the Principles for Responsible Investment (PRI) and the growing dedication to climate-focused portfolios by Nordic pension companies such as PKA and AP Pension.

Interviews and roundtables highlight shifts in investment strategies reflecting rising ESG demands. Kari Vatanen’s move to Veritas Pension Fund illustrates a transition to factor-based diversification and a recognition of behavioral finance's role in market dynamics. Additionally, Realdania’s revised strategy introduces mission-related investments aligned with its philanthropic objectives while increasing allocations to illiquid assets. Nordic pension funds actively navigate challenges around cultural fit and values with external managers, underscoring the importance of shared principles for ethical, sustainable, and effective collaboration. The Icelandic investor roundtable further reinforces commitment to ESG integration, responsible ownership, and the balancing of exclusions and engagement in portfolio construction.

Leadership mobility and industry growth are also spotlighted, with figures such as Henrik Gade Jepsen departing Danske Bank and Björn Kvarnskog’s latest move to Abu Dhabi Investment Authority, reflecting continued internationalization and professional evolution in Nordic fund management. Meanwhile, MFS Investment Management advocates resisting short-term market pressures through active management emphasizing ESG integration and long-term horizons. Overall, the journal underscores the Nordic region’s proactive stance toward sustainability, responsible investing, and strategic innovation amid shifting regulatory, market, and societal expectations.

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Table of content

Introduction to Nordic Institutional Investment Developments

Overview of Nordic pension companies launching sustainable products, changes proposed in Sweden’s pension system, and emerging trends in ESG integration and diversification strategies.

Swedish Premium Pension System Reform Debate

Discussion on the controversial proposal to limit fund options and transfer management to AP7, including industry criticism, concerns about fund concentration, political interference, and impacts on smaller active funds.

Editorial Insights on Climate Change Risk in Investments

Highlight of Danish Financial Supervisory Authority emphasizing climate risk scenario analyses and examples of leading funds demonstrating resilience despite geopolitical and economic challenges.

Risk Premia to Total Portfolio View: Interview with Kari Vatanen

Insights from Kari Vatanen, incoming CIO at Veritas, on integrating factor-based diversification, market behavior changes toward behavioral models, and managing portfolio risk factors amid uncertain economic signals.

Responsible Investing: Practical Approaches and Industry Evolution

Discussion with Finnish experts Antti Savilaakso and Anna Hyrske on their new book about responsible investing, emphasizing the shift from ‘why’ to ‘how’, complementary integration strategies, data challenges, and the EU’s taxonomy initiative.

Danish Pension Companies Launch Green Pension Products

Coverage of new climate-focused pension products by Danish companies such as AP Pension and PFA, customer-driven demand for sustainable options, investment asset allocation strategies, and varying industry approaches to green product lines.

Bank of Finland Signs PRI and Market Trading Hours Debate

Announcement of the Bank of Finland joining the Principles for Responsible Investment (PRI), with reflections on unique central bank investment constraints and preferences. Norges Bank Investment Management comments on proposed London Stock Exchange trading hours reduction.

Personnel Movements and Market Leadership Changes

Reports on key appointments, departures, and internal reorganizations involving Nordic asset owners, pension companies, and investment management teams, including strategic CIO changes and new roles within leading firms.

Interview with PKA CEO Peter Damgaard Jensen

A retrospective on PKA’s climate investment leadership, reflections on green transition commitments, the establishment of the Climate Investment Coalition, collaboration with governments, and lessons learned from investment challenges.

Focus on Corporate Culture and Values in External Manager Selection

Exploration of the importance of shared values and culture alignment between Nordic pension funds (AP1 and AP2) and their external managers, with discussions on due diligence practices, case studies of manager conduct, and continuous monitoring strategies.

Roundtable on ESG Integration with Icelandic Investors

Dialogue among Icelandic fund representatives and global asset managers on ESG policy evolution, challenges in data standardization, engagement versus exclusions, passive versus active strategies, and future thematic focuses including environment and governance.

MP Pension Gains First External Pension Fund Client

Profile of MP Pension’s new mandate managing LD Pensions’ Danish equity portfolio, strategic resource enhancements, planned push on active ownership priorities, including tax transparency and diversity efforts in portfolio companies.

Realdania’s New Mission-Related Investments and CIO Transition

Insights into Realdania’s refreshed investment strategy emphasizing mission-related portfolios, responsible investing updates, increased illiquid asset allocations, and the unique four-phase decision process developed under outgoing CIO Peter Johansen.

International Career Moves: Björn Kvarnskog from Melbourne to Abu Dhabi

Overview of Björn Kvarnskog’s transition from Australia’s Future Fund to a senior advisory role at Abu Dhabi Investment Authority, the role’s strategic emphasis, and reflections on his contribution to global equity restructuring and team collaboration.

Perspectives on Nordic Investment Trends: Per Künow of MFS

Discussion on the dominance of passive investing, growth in alternative assets, challenges of low yields and high valuations, and underexploited opportunities in fixed income and thematic investing such as US municipal bonds and global infrastructure equities.

Closing and Publisher Information

Details on Nordic Fund Selection Journal’s publication, editorial contacts, publishing schedule, upcoming industry events, and acknowledgments of featured advertisers in the issue.