Issue 2, 2018

The Nordic pension and investment industry is undergoing significant evolution, particularly in responsible and sustainable investing. Leading players like AP2 are pioneering bespoke ESG-integrated indices, embedding sustainability alongside risk factors to enhance portfolio resilience and returns. Institutional investors increasingly prioritize ESG data not just as a risk management tool but as a value driver, with active engagement and impact investing gaining traction. However, challenges remain around standardizing ESG definitions, balancing quantitative data with qualitative insights, and aligning strategies across varied markets.

Concurrently, shifts in fund selection and management practices reflect regulatory changes and market demands. The implementation of MiFID II has prompted Nordic distributors like Skandia and Nordea to streamline fund platforms, focusing on quality over quantity to comply with transparency and cost-effectiveness standards. At the same time, internal management gains prominence as pension funds weigh cost savings and control against operational complexity and potential cultural shifts. Institutions like Lærernes Pension and MP Pension navigate these trade-offs carefully, highlighting the need for scale, expertise, and holistic portfolio approaches.

Pension funds also aim to diversify beyond traditional equities and bonds into alternatives and uncorrelated strategies, leveraging favorable financial positions and long-term horizons. For instance, Gamla Liv, a Swedish pension company, has allocated over half its portfolio to alternatives and real estate, while Greenland's Sisa expands in occupational pensions and local alternative investments amid regulatory reforms. Thought leaders emphasize active management, long-term intrinsic value assessment including ESG factors, and prudent risk management as pivotal for navigating the changing landscape presented by structural mega-trends, such as demographic shifts, environmental imperatives, and market transitions.

The magazine is only available to subscribers

If you’re new to Tell Media Group, create an account first.

Table of content

Interview with Elo’s Chief Investment Officer Hanna Hiidenpalo

Discusses Elo’s digital transformation in investment operations, introduction of new investment professionals skilled in coding, and the shift to team-based investing supported by advanced data analytics and tools.

AP2 Designs Pioneering ESG Benchmarks for Global Equities

AP2 replaces global equity benchmarks with internally created ESG-integrated indices to enhance returns and sustainability impact, utilizing proprietary factor selection and smart beta strategies.

Roundtable on ESG Integration in Stockholm

Industry experts debate definitions, data challenges, engagement strategies, and emerging trends in ESG investing emphasizing the importance of bespoke approaches and collaboration.

News Analysis: Ilmarinen’s New Investment Team Line-up

Covers Ilmarinen’s merger with Etera, resulting in organizational restructuring and strategic focus on alternative assets amid concerns of asset class overheating.

News Analysis: Ericsson Pensionsstiftelse’s Risk-Factor Mapping

Highlights Ericsson Pensionsstiftelse’s portfolio risk-factor modeling, cautious private equity exposure amid high valuations, and selective manager relationships.

News Analysis: Fund Selection, Platforms and MiFID II

Examines Nordic platforms’ differing responses to MiFID II regulations with some narrowing fund offerings and others maintaining broad selections, reflecting on retrocession acceptance.

Helsinki Bourse Club’s Vote on Non-Women Clause

Details controversial club’s scheduled votes on allowing female members after narrow majority support in survey, highlighting cultural and reputational challenges.

On the Move: Industry Perspectives and Highlights

Various industry updates including Spotify’s stock market debut, Nordic collaboration on digital due diligence, green investment divestments, and CO2 reduction progress by OPF.

The Dilemmas of Insourcing Asset Management

Explores Nordic pension funds’ considerations on internal asset management relative to cost savings, organizational impact, strategy flexibility, and long-term focus.

Investor Focus: SEB Gamla Liv’s Diversification Strategy

Details Gamla Liv’s significant allocations to alternatives and uncorrelated assets, cautious approach to hedge funds and shift from listed equities and bonds.

Åbo Akademi University Foundation’s Active Stock Picking

Profiles foundation CIO’s bottom-up investment approach focused on transparency, stable dividends, and long-term risk-managed portfolio construction.

Greenland’s Sisa Pension Fund’s Growth and Strategy Shift

Discusses Sisa’s expanded role under new mandatory pensions legislation, outsourcing model, diversification push, and focus on Greenlandic alternative investments.

Book Review: “The End of Indexing” by Niels Jensen

Summarizes key themes about structural mega-trends affecting markets, the risks to passive investing, and recommendations for active management focus.

Up-Close and Personal: Niina Bergring, Veritas CIO

Personal interview covering her career path, investment philosophy emphasizing fundamental analysis, ESG integration, and work-life balance.