Recognising sustainability factors at SPP

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“It is about putting in place building bricks. We need to access the best bricks, so unlike some competitors we will bring in competitor funds and take out internal funds.”

So says Helena Jendelid, who leads selection of funds at Stockholm headquartered SPP, the business that started in 1917, when it was established as Sveriges Privatanställdas Pensionskassa, initially offering insurance based retirement solutions to salaried staff of the Wallenberg and Söderberg families, who were active in financial services.

Fast forward via a number of ownership changes, and SPP most recently was acquired by Norwegian insurer Storebrand in 2007. Jendelid therefore works closely with Nordic selector colleagues such as Georg Skare Lund, who is based at Storebrand’s headquarters in Oslo.


SPP services different client types, including retail, and this requires a documented process that explains how it develops the range of funds it offers, Jendelid says. There is a clear strategy, she continues. This leads to a diversified portfolio for different market environments, for example a fund for difficult times and for good times, but also in consideration of the manager’s philosophy, process, and whether it is focused on value/growth, small/mid/large cap, and so on.

“There is a lot of thinking around correlation,” Jendelid explains.

SPP uses both active and passive funds, to be able to offer something to everyone, and is committed to avoiding market timing. Both internal and external funds are tested the same way, both during the search process, but also during the monitoring once selected.

Helena Jendelid is head of Investment Offering at SPP Life Insurance AB, based in Stockholm. She is also on the board of the Sweden Sustainable Investment Forum, SWESIF, which in turn is a member of EUROSIF. Previous roles have included fund selection and multimanager investments on behalf of DnB Nor Kapitalforvaltning.

SPP is known for its mandate to focus on sustainability and responsible investments. This also affects the types of factors that will be investigated during the selection process, not just at the fund level, but down to the individual holding level.

The company has also launched a sustainability marking of funds, which initially has been intended for retail clients, to enable another way of comparing products in addition to volatility and returns.

This is reflected in the selection that Jendelid and colleagues perform, looking for fund companies that can show a solid policy towards their own sustainability objectives, that avoid underlying equity exposure to companies that do things considered dangerous to people’s health and wellbeing, and where the funds from a sustainability point of view are better than the average in their sector.

”We are alone in the market with such a sophisticated sustainability marking of funds, and we work continuously to improve our methods and processes,” Jendelid adds.

Realistic numbers

Jendelid notes that it is important to avoid selecting an unnecessarily large range of funds. “Most investors do not want, say, 700-1,200 funds in the range.”

SPP has some SEK63bn (€6.8bn) in its range of about 74 selected funds, but still seeks to guide customers through, for example, portfolio analysis tools. Overall, the AUM is diversified according to a five factor principle: region, philosophy, process, fund company, and fund.

Jendelid and colleagues always seek to meet portfolio managers in pairs, and do so at the fund company’s premises rather than at SPP, which provides the benefit of having two perspectives on what is discovered.

Another differentiator noted is that the teams which have made the fund selection also negotiate with the relevant fund company. Meanwhile, there is an ongoing change in the way relationships develop with companies whose funds are being considered.

“It is much more about cooperation rather than focus on commission. This is a clear trend and it is a healthy development.”

Once selected, funds will be kept on a watchlist for key red flags to note, for example, when key people leave or if there is style drift.


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