Issue 6, 2014

The December 2014 issue of the Nordic Fund Selection Journal covers a broad spectrum of topics pertinent to Nordic institutional investors, fund selectors, and industry professionals. A key highlight is the in-depth interview with Unipension’s Chief Investment Officer, Niels Erik Petersen, who provides insights into the ongoing Principles for Responsible Investment (PRI) governance review. Petersen reflects on the departure of many Danish pension funds from PRI due to transparency and governance concerns, noting efforts to simplify and improve the governance structure. However, he acknowledges that while improvements have been made, it remains uncertain if all former members will return, though the PRI continues to emphasize asset-owner leadership amid a growing membership of investment managers and service providers.

The journal also offers extensive coverage of the Nordic Fund Selection Awards 2014, celebrating excellence in fund and manager selection across Denmark, Finland, Norway, and Sweden. The awards underscore the evolving professionalism within fund selection teams and provide a valuable benchmarking platform. Complementing this is a roundtable discussion featuring representatives from Aviva Investors, Natixis, and Standard Life Investments, which debates emerging versus developed equity markets in 2015. Participants highlight the nuanced risks and opportunities in emerging markets, the growing preference for active over passive management in such regions, and the influence of geopolitical tensions and central bank policies on asset allocation strategies.

Looking ahead to 2015, the journal identifies key industry themes, including regulatory challenges posed by MiFID II, the increasing importance of institutional investors in the Nordic market, and a sustained investor focus on emerging markets and alternative assets. The rising presence of robo-advisors is noted as a disruptive force reshaping distribution and asset management models. A notable trend anticipated is the decline of closet indexing due to regulatory scrutiny and investor demand for transparency and genuine active management. The issue also features profiles of influential fund selectors operating in the Nordic region and commentary on the evolving platform landscape exemplified by AXA Elevate, which integrates sophisticated multi-manager strategies with regulatory compliance to serve advisor and institutional client needs.

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Table of content

Nordic Fund Selection Awards and Industry Highlights

The Nordic Fund Selection Awards 2014 celebrated excellence in fund and manager selection, recognizing fund selectors across Denmark, Finland, Norway, and Sweden. It highlights fund selectors’ roles in sourcing top investment talents and improving dialogue between selectors and fund companies. The event featured discussions on behavioural finance and fund industry trends, emphasizing transparency and consistent communication.

PRI Governance Review and Nordic Investor Perspectives

The UN-backed Principles for Responsible Investment (PRI) is undergoing governance overhaul following the exit of several Danish pension funds due to transparency and governance concerns. While reforms aim to simplify structure and enhance accountability, Nordic investors remain cautious about re-joining. The PRI continues asset-owner dominance, including investment managers and service providers, but must balance global growth with member needs.

Market Developments and Regulatory Outlook in the Nordics

Regulatory changes, notably the EU’s MiFID II directive and Swedish initiatives, signal significant impacts on investment fund distribution and fee structures, including commission bans. Nordic countries actively consider enhanced regulations to improve industry competitiveness. Key personnel changes and strategic company developments reflect the evolving Nordic asset management landscape.

Danish Pension Fund LD’s Manager Tender Process

Danish pension fund LD completed an extensive re-tendering of external mandates, reflecting lessons learned from past processes. Despite upcoming asset outflows triggered by tax legislation, LD maintains its strategy, emphasizing liquidity, risk management, and selective external mandates. The fund blends internal knowledge with tailored allocations, focusing on transparency, efficient manager selection, and mitigating risks.

Roundtable on Equities with Aviva, Natixis & Standard Life Investments

Industry experts debate active versus passive management, especially in emerging markets, emphasizing diversification, ESG integration, and active share importance. Central bank policies, geopolitical risks, and currency trends shape portfolios, underscoring selective investing to capture nuanced growth themes like healthcare and technology. Emphasis on manager conviction, robust investment processes, and behavioural finance enhances long-term outcomes.

Selected Industry and Market News and Updates

Recent appointment of key industry executives, fund restructurings, and strategic shifts across Nordic asset managers showcase adaptation to market and client demands. Topics include regulatory scrutiny over closet indexing, growing interest in alternatives, and diversification into emerging markets. Fund managers and selectors adjust strategies amid evolving economic environments and increased regulatory oversight.

Nordic Fund Selector Ratings and Profiles

The report provides detailed ratings and interviews of fund selection teams across Denmark, Finland, Norway, and Sweden, evaluating professionalism, communication, and process quality from the perspective of fund companies. Winners include Danske Capital (Denmark), Aktia Invest (Finland), Storebrand Kapitalforvaltning (Norway), and Skandia Liv (Sweden). Profiles outline team sizes, selection approaches, and views on industry challenges.

Consultancy Firms and Personality of the Year

Leading Nordic investment consultancies like Wassum and Grieg are evaluated for research quality, client service, and selection processes. The Nordic Fund Selection Personality of the Year award recognizes Georg Skare Lund for his industry influence, extensive communication, and leadership in ESG integration, reflecting prominence in shaping Nordic sustainable investment practices.

International Selector Profile: AXA Elevate Platform

AXA Elevate represents a comprehensive UK-based platform, offering multi-manager and open architecture solutions tailored to evolving regulatory frameworks like MiFID II. Emphasizing transparency, cost-efficiency, and diversified product offerings, Elevate leverages in-house and external research, including quantitative screenings and face-to-face manager evaluations, demonstrating adaptability and client-centric growth strategies in a complex market.

Outlook for 2015 and Industry Trends

Despite geopolitical uncertainties and divergent monetary policies, Nordic investors show confidence especially in emerging markets and alternatives. Regulatory focus centers on MiFID II implementation and its effects on distribution. Trends suggest increased institutional opportunities, selective active management over passive, and regulatory pressures targeting transparency, reduced fees, and the elimination of closet indexing.

Inspiration: The Travellers and Lifestyle Elements

Industry professionals share insights on their travel experiences, preferred client engagement venues, and current investing themes reflecting Nordic preferences for Asiatic emerging markets exposure and tactical ETF usage. Complementary lifestyle features explore work perks globally, ethical considerations on benefits like egg freezing, and wine recommendations rooted in Nordic cultural contexts.

Upcoming Nordic Fund Selection Events and Publication Information

The journal outlines key Nordic asset management events scheduled in early 2015, including roundtables and the Nordic Fund Selection Forum. It provides publication schedules, contributor contacts, subscription details, and advertorial information, serving as a resource hub for continued professional learning and industry networking within the Nordic investment community.