Issue 4, 2018

The Nordic Fund Selection Journal Issue #04, 2018 highlights several key developments and insights in institutional investing across the Nordic region. The magazine covers topics such as Finland's awaited new private equity law aimed at encouraging domestic private equity investments by lifting tax burdens on foundations, which currently favor foreign fund allocations. It also features roundtable discussions with Danish investors on emerging market debt strategies and interviews with Swedish pension fund leaders Alecta and AMF, who are reevaluating their investment approaches amid changing market conditions, including diversifying into alternative assets and hedge funds. Additionally, Icelandic investors are actively advancing ESG integration through the newly established Iceland Sustainable Investment Forum, reflecting growing Nordic momentum toward responsible investing.

A significant thematic focus of the issue is the growing emphasis on ESG integration in fixed income investing, as exemplified by UBS's multi-step approach that combines materiality analysis and fundamental credit assessment to capture sustainability risk beyond mere third-party scoring. Franklin Templeton’s Chief Investment Officer Michael Hasenstab also discusses leveraging forward-looking ESG research to identify credit risks and alpha opportunities in sovereign debt markets. The journal further illustrates practical impacts of ESG through the experiences of Denmark’s Velux Foundations, which are pioneering green impact portfolios, as well as Folketrygdfondet’s responsible investment initiatives led by analyst Annie Bersagel. Overall, the issue offers a comprehensive and forward-looking perspective on Nordic institutional investors' strategies amid evolving regulatory, market, and sustainability landscapes.

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Table of content

ESG Integration in Fixed Income Investing

Explores the growing interest in ESG investing beyond equities, focusing on challenges and approaches to effective integration in fixed income. UBS’s multi-step integration process emphasizes materiality and forward-looking analysis to align ESG with credit risks.

Sweden’s Alecta Reviews Investment Strategy

Discusses new CIO Hans Sterte’s balanced approach between liquidity and illiquid assets amid changing market conditions, with a focus on enhancing portfolio robustness and considering new asset classes cautiously due to high valuations.

Finnish Foundations Await New Private Equity Law

Examines the implications of pending legislation exempting Finnish foundations from taxation on domestic private equity investments, aiming to boost domestic funding and diversification in private equity markets.

Icelandic Investors Mobilising on ESG

Details the establishment and rapid growth of Iceland SIF, the sustainable investment forum fostering ESG integration, education, and regulatory guidance among Icelandic financial institutions.

AMF’s New Direction and Portfolio Developments

Interviews AMF CIO Javiera Ragnartz on evolving investment strategies, expanding private debt, infrastructure, and hedge fund allocations to navigate lower returns and heightened market complexity.

Changes in the Danish Investment Landscape

Reports significant personnel movements in fund selection teams at Danish pension funds and asset managers, indicating strategic shifts and industry dynamism.

In Search of a Higher Purpose: Stefan Björkman

Profiles Björkman’s transition from pension asset management to cultural leadership, emphasizing meaningful work and digitalization’s role in enhancing organizational life quality.

Roundtable: Emerging Market Debt Strategies

Summarizes discussions among Danish institutional investors on emerging market debt allocations, the role of blended mandates, importance of local markets and investors, and the impact of China’s market opening.

PFA’s Future Strategy for Greenland

Analyzes the recent closure of PFA Soraarneq and asset transfer to Denmark, focusing on product modernization, client retention, and commitment to the Greenlandic market amidst regulatory changes.

Experiences from an Impact Investor: Velux Foundations

Shares insights on building a green impact portfolio with target allocations, challenges in sourcing quality investments, reporting, and hopes for inspiring broader sustainable investing.

Capturing ESG Alpha in Fixed Income

Outlines Franklin Templeton’s forward-looking ESG research methodology for sovereign credit investing, highlighting the integration of ESG analytics for superior risk-adjusted returns.

In Conversation: Jesper Kirstein on Big Data and Investor Preferences

Details the founder’s initiative to apply big data analytics to investor surveys to uncover manager selection criteria, emphasizing organizational growth and adapting to industry complexity.

Up-Close and Personal: Annie Bersagel

Profiles Bersagel, combining her role in responsible investment analysis at Folketrygdfondet with her activity as a world-class mountain runner, reflecting on career highlights and personal interests.

Nordic Fund Selection Journal Overview and Future Outlook

Provides information about the publication, editorial team, upcoming issues, and planned events relating to fund selection and asset management trends in the Nordic region.