Storebrand’s Bergh on picking managers and looking for the human element
Jan Tore Bergh, responsible for external manager selection at Storebrand Investments, predominantly in the area of private equity and hedge, talks about his role.
You are responsible for external manager selection at Storebrand Investments. As you are part of Storebrand, a broader bancassurance group, do you have to work in a particular way?
My responsibilities are in alternatives and fund selection. That means I am responsible for selection for unit-linked platforms, for unit-linked companies within the Storebrand Group.
In addition, we run discrete external mandates on behalf of life insurance companies within the group – that’s both SPP (a Swedish life and pension provider) and Storebrand.
The discrete mandates include long-only,infrastructure, international property and responsibilities for micro finance activities.
Then we also have mandates organised as products that we offer to other clients, which means external to the group clients, within private equity (PE) and hedge funds. So, it is a fund of funds platform within PE/hedge.
Do you have exposure to commodities?
We have individual commodity funds on the unit-linked platforms, as well as in the portfolio of hedge funds. But there is no dedicated mandate for commodities.
How is your team structured?
There are 12 people, divided into two groups. Hedge fund and long-only – call it more liquid strategies – then PE and more illiquid strategies.
We have about NOK17bn [€2.17bn] under direct management, but are also responsible for selecting funds for the unit-linked platforms. It depends how you want to count it.
With respect to processes, what we have tried to do in recent years is to establish a more or less ‘common investment process’ for different asset classes.
Of course, there will be differences.
But we are trying to develop a lean and efficient type of investment process, which we are trying to stick to in a disciplined way.
How do you source new ideas?
Inputs and ideas come from all over: internally, meetings with managers, news, literature; all kinds of sources.
However, we try to bring those ideas into our process in a structured way.
We do it on a periodical basis, making summaries of our views with respect to the market and how it is developing, what would be a sensible way to play with the markets going forward, and the themes to play.
There will be different themes for different asset classes, and there will be different ways we bring those themes into play.
For example, there is a different way to how we bring themes in on the unit-linked platform. There, we cooperate closely with the unit-linked companies.
They need to also consider the balance of the offering, and a variety of aspects that come into that, such as the cost profile on the unit-linked platform.
More explicitly, they need to consider variety, depth and how wide the offering should be towards customers.
How does the process continue?
Given the depth and breadth of the platform on the unit-linked side, and the products we run on the PE/hedge platform, we run this as a specific process.
Starting around the new year, we look into macro trends, activity of sub-strategies, and so on.
Then we make a rudimentary allocation between sub-strategies. It represents a pattern or type of goal resulting in a list of things to look into during the year.
There is an allocation process that comes out of that, which is updated on a quarterly basis.
In addition, we run thematic searches, looking at them in depth. This creates a screening process, which then moves on to identifying what kind of managers there are, using network agents, databases and literature.
Then it goes on to the desktop screening stage, looking at strategy, return, risk aspects, organisation and fee structure.
Having done that, there will be a more thorough due diligence process, involving meetings with managers, and involving both quant and qual factors. We also have our own forms to fill in to ensure we have not missed anything.