Issue 3, 2020

The Nordic Fund Selection Journal’s 2020 issue #03 presents an insightful overview of the evolving landscape of institutional investing in the Nordic region amid the backdrop of the Covid-19 pandemic and market volatility. Prominently featured is the return of Timo Löyttyniemi as CEO of VER, Finland’s state pension fund, during “hugely interesting times,” where he emphasizes cautious tactical asset allocation amid market shakeouts and the importance of sustainability and impact investing. Similarly, other institutions such as Realdania and the University of Helsinki reveal strategic shifts toward integrating ESG considerations and impact portfolios, focusing on long-term sustainable value creation and aligning investments with broader social missions.

The issue also highlights the strain the pandemic has placed on traditional asset manager and investor relationships, with Nordic sales teams adapting rapidly to remote communications and virtual meetings, signaling a likely lasting transformation in client engagement. Research from Kirstein suggests a rising confidence in active credit management as equity managers face performance and communication scrutiny. Meanwhile, seasoned professionals express concerns over political uncertainties, market liquidity shocks, and the challenges faced by smaller boutique firms in securing new mandates without traditional due diligence. Interviews and roundtables underline the importance of prudence, flexibility, and innovation in navigating alternative credit markets and the broader investment landscape, as well as the continued evolution and tightening of ESG integration and reporting requirements.

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Table of content

CEO Return Amid Global Crisis

Timo Löyttyniemi returns as CEO of VER during the coronavirus pandemic, focusing on asset allocation, risk management, impact investing, and adapting to market volatility with a pragmatic approach.

Alternative Credit Investments in Nordic Region

Danish investors discuss increased interest in alternative credit, tactical shifts towards high yield and emerging market debt, highlighting active management’s value during the crisis.

Nordic Asset Owners’ Views on Manager Performance

Survey reveals skepticism towards equity managers’ performance and communication, while active credit managers maintain investor confidence amidst market challenges.

Realdania’s Focus on Mission-Related Impact Investing

Danish foundation Realdania advances its impact allocation strategy, emphasizing global footprint, ESG integration, and partnerships to align investments with philanthropic mission.

University of Helsinki’s Investment Strategy Overhaul

Introduction of a dual beta-alpha portfolio approach with emphases on cost efficiency, academic grounding, proprietary research-based alpha, and revised ESG policies.

Ilmarinen’s ESG Pioneer Moving to Central Bank

Anna Hyrske’s departure after over 14 years at Ilmarinen marks a transition, reflecting on responsible investment evolution, challenges in Asia, and development of ESG-focused ETFs.

Varma’s CIO on Crisis Management and Strategy

Reima Rytsölä outlines liquidity management, customer loan challenges, adaptive asset allocation, sustainable investing targets, and the significance of staff rotation during the pandemic.

Sustainability and SDGs: Asset Managers’ Role

Exploration of how global asset managers contribute to addressing environmental and social challenges by aligning capital allocation with United Nations Sustainable Development Goals.

Changing Dynamics in Nordic Sales Roles

Asset management sales professionals adapt to remote client interactions, leveraging digital tools while anticipating lasting changes in travel and client communication post-pandemic.

Danish Roundtable on Alternative Credit

Discussion among investors and managers about risk trends, manager selection, impact of Covid-19 on credit markets, covenant-lite debate, ESG integration, and future industry consolidation.

Söderberg & Partners’ Manager Selection Innovation

Implementation of overlapping team responsibilities in fund research, emphasis on transparency, feedback loops with managers, and strategic advisory board setup incorporating external expertise.

Challenges for Boutique Asset Managers

Osmosis IM’s CEO Ben Dear shares perspectives on operational due diligence constraints amid the crisis, importance of innovation, risks of industry consolidation, and digital engagement strategies.

Editorial and Contact Information

Details about Nordic Fund Selection Journal’s editorial team, publication schedule, and avenues for industry engagement, including upcoming roundtable discussions.