DnB NOR plays to its strengths
Per-Erling Mikkelsen (pictured), director at DnB NOR Asset Management discusses the domestic market and his firm’s approach to selection
Have there been changes to the way in which Norwegians approach investments?
If you ask me, ‘Are Norwegian clients becoming more professional?’ I say yes, in one way.
If you look at what they did after the financial crisis, I think they were more professional in terms of becoming buyers of equities during that period. That has to be the first time.
Hopefully, in ten to 20 years’ time, when we measure the difference between time weighted and money weighted return, we will see that clients are actually doing better.
Where do DnB NOR AM’s strengths lie?
It is Nordic equities, renewable energy – of which we have a very good fund – Nordic technology, energy and shipping.
Some of these niche products have done very well over a long period. These are not the core of our manufacturing because of the volumes.
For the national market, we have large sums in our Aktiv series and S5 series. But internationally, we try to put forward the Nordic equity side along with these niche products – a policy we feel plays to our strengths.
How does your own selection process work?
We screen funds by using quantitative tools from Morningstar and Factset. In addition, we have a consultancy agreement with Mercer for the more qualitative part of the research.
Of course we have, in our opinion, one large benefit, which is that we are managers ourselves.
Presumably beyond screening, you visit managers to look them in the eye and shake their hands?
Of course, we do both screening and meetings. It depends on what kind of managers we are looking for and how far we need to travel to look them in the eye.
For example, for our unit-linked platform for our life insurance, it is important with a broad range of international products that we have to hire well-known, well-reputed managers. You do not find very many boutique managers in that range.
With our Fund of Funds (FoF), we have boutique managers as well as products from better known, reputable, large houses.
The disadvantage of boutiques is that they may be based elsewhere. If you take a product from a Schroders or JP Morgan, you may find their product specialists are based in Stockholm.
You know Neptune in London? We use them, we find them very interesting as an asset manager, and they are in our FoF package. Obviously, it is a bit more distance to travel, but we feel we have to use both types of managers.
Most UK-based managers are eager to call me. So it’s no problem getting in touch. The problem is to hold them at an arm’s length!