Nordic bank Nordea has developed into the largest financial services group in Northern Europe, and its asset management arm, Nordea AM, is a growing player in the UK market.
Nordea AM was formed in 2001 and the most recent addition to its SRI-focused range is the Nordea 1 Global Stars Equity Fund. It now has close to €200bn in assets under management across its 69 funds partly under a Sicav umbrella.
Claus Vorm, senior portfolio manager and deputy head of multi-assets, and Asbjørn Hansen, head of the multi-asset team, co-manage another flagship strategy, the Nordea 1 Diversified Return Fund, at the firm’s headquarters in Copenhagen.
Vorm and Hansen go way back, having met at university where they studied together (both hold a PhD in maths). After university, Vorm spent a few years at consultant McKinsey & Company, while Hansen worked in London.
The fund managers had the idea of trying to build something less restricted by benchmark and by a long-only approach. Instead, they wanted to work in a more unconstrained way, by focusing on return drivers rather than asset classes to build alpha differently to what has been done historically, and that was the starting point with the Stable Return Fund.
The team that managed Nordea’s range of multi-asset products before the duo took over in 2004 was more macro, says Vorm. However, since Vorm and Hansen took over they have been focusing on generating positive and stable returns through diversification and the use of risk balancing principles.
Hansen believes this approach to investing was new at the time. He says: “I think it was new back then. We came in with a mandate precisely to do something different, to build balanced portfolios and multi-asset portfolios by investing exactly in what we liked from a risk/return perspective, and not only from what was in the benchmark.”
According to Hansen, benchmarks have historically been a strong driver of how funds are positioned in the universe; you can compare the funds more easily and benchmarks often tie in with clients’ risk profiles.
Their strategy is different. Hansen says: “We do it from an investment rather than a client perspective. It is still an outcome-driven product and still has a risk frame, but it is not identified by the benchmark.”