When the conservative approach matters
Portfolio manager Robin Hamro-Drotz talks about the conservative approach that has served Finland’s Ålandsbanken Asset Management well in its selection activities.
Ålandsbanken Asset Management (AAM) has about €1.5bn in AUM, with €250m in external funds. Established in 2001 by three partners (two from Gyllenberg and one from SEB), it retains a distinct Finland-market focus.
Perhaps reflecting the conservative nature that enabled its parent bank to survive unscathed the Nordic banking crisis of the 1990s – it was the only listed Finnish bank to survive without state aid – AAM takes a particular view of the world: it defines itself as a long-only, absolute return, non-index tracking manager, says Robin Hamro-Drotz (pictured), portfolio manager.
“We believe in active management, but in certain cases we use index funds or ETFs: for example if there is a certain sector or market we want to access.”
Investment ideas sifted from data sources such as Bloomberg and Morningstar – and others, such as newspapers and conferences – are then put through quantitative and qualitative analysis.
Hamro-Drotz says: “We rely on a qualitative process, but it moves in step with the quantitative process. Because there are so many funds, it is necessary to run the quantitative first. Then it is the qualitative, then the quantitative again. We rely more on the qualitative, but to do that properly you need quantitative tools to do performance attribution, correlation, to see how the fund has acted during different periods, then compare that with the qualitative aspects.”
AAM uses an approved list, but if during the allocation discussions another fund name is raised it can be added ad hoc. In most areas, there is another fund waiting in the wings, or a back-up short list.
“Currently we are defensively positioned. Defensive strategies are what our customers are hungry for: that’s absolutely clear. This affects how much cash is there, but because the management is discretionary, it is up to AAM what assets ultimately are held in their portfolios,” Hamro-Drotz adds.
“We have discretionary mandates so customers don’t come to us and say, ‘I’d like to be more defensive’ or, ‘I want this or that strategy.’ We make the decisions. It’s more efficient for us. Of course, this means it is very important to understand the most suitable risk level for the customer. Some may have specific requirements, such as being insiders, which means they are prohibited from being invested in certain companies. Or they don’t want to be in certain areas such as emerging markets. But otherwise, we run it all.”