Fofs and multi-asset focus
Stephanie Gabrielsson, CIO and portfolio manager at Skandia Fonder, explains her selection role for internally managed funds at the company
Skandia is one of the bigger domestic financial services groups in Sweden, having returned to its roots following a deal in early 2012 that saw Skandia Liv acquire Skandia AB from Old Mutual.
Skandia Fonder is the fund manufacturing part of the group, the Nordic region’s biggest mutually owned life, banking and investments provider, claiming about SEK440bn (€51.5bn) in managed assets. About 20 of the 30 funds Skandia Fonder offers have outsourced management, says Stephanie Gabrielsson (pictured), CIO and portfolio manager.
Some SEK45bn (€5.2bn) of Skandia Fonder AUM is managed by DNB, with Goldman Sachs AM being another key outsource provider. DNB is also responsible for the administration of the Skandia Selected and Skandia Skala funds ranges, these being the internally managed funds where Gabrielsson has key responsibilities in terms of selection and allocation.
The Selected range comprises four funds of funds, with Skala funds constituting five multi-asset funds offering different levels of risk exposure.
The Selected range of Fofs –Global Försiktig, Offensiv, Strategi and Utland Offensiv – invest predominantly in a mix of traditional assets via equity and fixed income funds, but also have the ability to take positions via derivatives where considered appropriate. Their risk levels vary from low to high according to the related key investor information documents (Kiids).
The Skala funds are targeting different levels of risk and allocate between asset classes for “as low a cost as possible,” Gabrielsson says.
As CIO, Gabrielsson is involved in developing the macro view that acts as an input into the selection process, as well as picking funds. Besides the macro view, the selection process takes heed of whether funds are of a certain style, such as value versus growth. Quants are used for the filtering, primarily looking for performance, and using tools and data sets from the likes of Factset and Morningstar.
Meetings with managers follow to understand their process, philosophy, the people involved, the organisation and its resources, ongoing AUM, and performance attribution are required to check that they are actually the value manager they claim to be, Gabrielsson says.
She does not specifically exclude new funds, and will even consider seeding activities. The key issue for her is access to daily liquidity.
In terms of alternatives, Gabrielsson has been sitting in the same boat as everybody else in Sweden with regard to the implementation of the AIFMD at the local level (that is, being forced to wait for the final rules, even as the July deadline looms).
Of particular interest is how the new regulations may impact Swedish ‘special’ funds, which have hitherto been treated differently in domestic funds law, but in future will be subject to the AIFMD. Gabrielsson says she has “been following the debate closely”.
Gabrielsson works with Skandia’s Manager Research group, which is also used by other parts of the group, such as Skandia Liv.
The specialists in Manager Research can be called upon to assist on specific questions.
“Typically, it takes a lead time of between one and six months from having an investment idea to concluding that a fund can be added. But this depends on finding a good manager, and if none are deemed suitable, the process can take longer.”
In terms of trends in the market, Gabrielsson says she sees interest in areas such as absolute return, and a focus on risk and knowing how risk is being managed.
This explains why the Skala range has attracted strong inflows, she says. The funds have built up a three-year track record, and can show proven management of volatility, correlation and risk premia, especially for investors and advisers looking for fire-and-forget products where ongoing allocation is done on their behalf.
Among the types of funds Gabrielsson herself is seeking out, she says market neutral absolute return funds with daily liquidity, emerging market small-cap and debt funds are on her radar.