The Kirstein Nordic Intelligence 2016 report is available from a.jensen@kirstein.as, September 2020 data as of 15 October 2020. Luxembourg’s growing role as a hub for alternative investment funds sees service providers such as TMF Group and Selectra partnering to offer a wider range of... Oracle’s global head of solutions, Richard Clarkson, charts the evolution of the transfer agency model from its simple beginning to its... Nicolas Buck co-founded software firm Seqvoia to help firms manage product data and is now looking to increase clients’ data governance ability with the latest creation,... Clearstream, the post-trade division of Deutsche Börse Group, has finalised its acquisition of a majority stake in the Fondcenter B2B... Calastone’s chief revenue officer, Ed Lopez, tells Funds Europe money market fund investors are calling for change. The world of fund administration is likely to see a higher level of consolidation in the next two years due partly to “unprecedented” changes in areas such as technology. Albert Løchte Jensen is an investment consultant at Kirstein Intelligence. The fact that 2016 was a “really good” year for investors was, she says, because of a greater appetite for risk-taking as investment managers rebalanced portfolio holdings of fixed income assets towards equities within balanced funds. This applies not only to asset allocation but also, not least, to the ways investments are being structured and how operational management is carried out. However, more investors have ambitions to increase internal resources in this area, which has resulted in some, especially larger investors, building significant in-house teams to manage alternatives. When looking deeper into the different asset classes, we find that, internal management has increased in equity in recent years, as investors’ need to reduce costs, in some instances, has led to higher levels of passive or rule-based management which is easier to manage in-house compared to fundamental active management. “We may see changes in the ways that funds are bought and sold as competition grows and we are ready for that,” she says. Nordic Cross Total Return Bond Fund – unconstrained fixed income absolute return strategy, Nordic Cross Stable Return – multi strategy fund, Nordic Cross Small Cap Edge – long/short equity fund with a small cap focus. Investors who look attractive, due to both size and asset composition, may in fact be irrelevant, since all assets are managed internally or because the entire portfolio is passively managed. The focus on fees is still the key reason why internal management has become popular among these larger investors. But Nordea, along with other asset management firms in the region, has also had its problems. The use of internal management in alternative investments remains moderate yet, ambitions are high. “A legal battle between the pension authority and a small number of funds that are alleged not to put investors’ interests first has been undermining confidence in the Ucits brand in Sweden,” Nordström says. Nordic investors are faced with a number of external factors, which, in combination with their general preferences, have a strong impact on how they organise themselves and manage their investments. Registered Office: 1 Kentish Buildings, 125 Borough High Street, London SE1 1NP, Global managers register largest yearly AUM increase in 2019, IPE Quest Expectations Indicator - November 2020, Print advertising rates and specifications, Digital advertising technical specifications (pdf). Looking at the overall asset allocation of the Nordic investors at the end of 2015, the allocation towards equity investments is more or less on par with the previous year and accounts for close to one-third of the total regional assets. Fonderna får använda derivat. This relatively high level is in line with a continuously overall high interest in traditional equity products across the region. How data reporting and migration can keep investors happy, AllianceBernstein enters real estate debt business, Man GLG targets Asian (ex-Japan) equities, Tabula unveils US-linked inflation fixed income ETF, Wells Fargo AM adds FI sub-fund to multi-asset portfolio, Fund managers must improve engagement with fintechs, Roundtable: From fundtechs to fund managers, Private equity rides to support European firms, Specialist fund admins will “shrink from thousands to hundreds”, Working from home spurs investment in real assets, Loomis Sayles hires former Kempen euro credit team. The increasing allocations to alternatives accords with the large number of funds registered in the asset class and can be explained by investors’ increased search for yield. UNDERMINING UCITSAn investigation into closet-tracking by the Swedish financial regulator concluded last year that the difference between an actively managed fund and an index fund is around 1 percentage point. In 2015, Norway’s financial regulator rapped its knuckles for selling an actively managed fund that closely followed its benchmark in a practice known as ‘closet-tracking’. All funds are actively managed with consistent risk monitoring. In her first interview since becoming chief executive of Legal & General Investment Management (LGIM) last year, Michelle Scrimgeour talks to Funds Europe about the company’s growth plans, diversity, corporate governance and the coronavirus pandemic. Regulatory structures and changes are at the top of many investors’ agenda and the investment implications are profound. Sweden, by far the largest of the four countries and with a fund industry three to four times the size of Norway or Finland, is the country with the longest and best-established tradition of saving into financial product investments by households. This is related to the fact that a high share of local fixed income is managed internally, as many investors feel comfortable in this area. We publish the Nordic Fund Selection Journal and host unparalleled events, such as the Nordic Fund Selection Forum, the Nordic Fund Selection Awards as well as networking events like Fondbar and Nordic … In the US there is a real chance that Joe Biden will win the presidency and the Democrats gain a majority in the senate. As of last year, the Finnish investors have 25% of their assets tied up in alternative strategies, whereas the allocation towards fixed income remains low at 43%. Sponsored feature: Surveyed investors expect China to lead global economic recovery. “From the Nordics it is hard to compete with ETFs domiciled elsewhere which are already established in the ETF space, as the competition is truly international.”. The increased internalisation of Nordic assets has shifted the dynamics of clients and what they are looking for. Together with the competitive landscape, this regulatory pressure has led to consolidation among pension funds, where smaller investors are merging with larger entities, if not entirely then at least in administrative or investment setups. “The supervisory authorities are on the case and have concluded that funds are on trend with lower fees and more active management in terms of active share and tracking error,” he says. Within alternatives, in-house management is not as widespread. The high degree of internal management is visible in local equity, as investors have easy access to the market and the resource requirements are lower. Institutional investors are planning increased allocations to real assets over the next 12 months due to the lasting impact of Covid-19 on world economies, including the working-from-home trend, research has suggested. By Albert Løchte JensenOctober 2016 (Magazine), The increased use of internal investment resources by Nordic investors is a challenge for asset managers, according to Albert Løchte Jensen. Therefore, it is fair to state that the increasing use of internal management among Nordic investors is a somewhat challenging trend that the asset management industry should be highly aware of. Largely led by fund manager VanEck, the development of ETFs exposed to bitcoin and similar cryptos is hindered by regulatory challenges. The use of internal management in other credit products is dependent on the asset class, since there are differences in the complexity of managing products. Nordic investors are faced with a number of external factors, which, in combination with their general preferences, have a strong impact on how they organise themselves and manage their investments. Chaired by Nicholas Pratt. So far, at least, those claims appear to be borne out by the stats. Brazilian Beef Producers: ESG Opportunity? However, the Norwegian market is steadily moving towards the greater use of platform sales and, from July this year, consumers in Norway will be able to move shares and mutual funds into individual savings accounts tax-free. “In order to assess the activity of a fund, you should also take into account other indicators of activity and risk, which is best done through a holistic performance review of both relative and absolute terms,” she says. Matias Möttölä, a Helsinki-based analyst at investment research firm Morningstar, says that anecdotal evidence suggests passive funds have been steadily taking more market share in the Nordics, particularly from open-ended active funds – although a lack of data about the nationalities of investors into ETFs makes it hard to verify the flows. Alexandra Morris, chief investment officer of Stavanger-based funds firm Skagen, contrasts Sweden’s platform-dominated market (where the move to platform-selling was pushed forward by the government’s introduction of individual savings accounts) with Norway’s reliance on direct sales. Copyright © 1997–2020 IPE International Publishers Limited, Registered in England, Reg No. He adds that institutional and retail investors in Scandinavia are thought to be putting substantial amounts of money into index-tracking passive ETFs domiciled elsewhere in Europe, particularly in Ireland and Luxembourg (where, for example, Nordea’s ETFs are based) – from where it is easier to sell internationally across platforms. Across the Nordic region, we find that there are key regional differences, which are described in our most recent study. 685 1784 92. Copenhagen: The Nordic Capital of Asset Management and Fintech. NCAM Balanserad - modern mixed fund with nordic focus. Internal affairsFrom the asset managers’ points of view, it is of utmost importance to be able to identify the share of accessible assets. While one of the biggest challenges for the global funds industry over the past decade has been the massive outflows from actively managed funds to cheaper index-tracking funds, active fund managers in the Nordics region claim that the impact of the trend on the region’s institutional and wholesale market has been more limited and that active funds continue to prosper.
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