Swedish industry seeking local and pan-European opportunities
After a surprisingly strong 2012 for the funds industry in Sweden, foreign asset managers are looking for ways to further tap local demand, while domestic players are positioning for pan-European growth via exports.
The Swedish investment funds industry has never been in better shape, according to industry data.
The Swedish Investment Fund Association – Fondbolagens förening (FF)– reported record AUM among its members of about SEK2trn (€240bn) at the end of 2012, driven by the effects of stronger net sales of equity funds in the last quarter of 2012 coupled with appreciation in the market overall.
“The end result for funds was very surprising,” says FF CEO Pia Nilsson. “Assets reached a record level of SEK2.05trn after an increase of SEK230bn during the year, of which SEK75bn came from new savings and SEK155bn in increased value.”
Sweden’s role as one of Europe’s strongest funds markets was also identified in Lipper data published in February on European cross-border fund sales. The data, which ran up to the end of December 2012, suggested Sweden was the biggest individual market by estimated net sales over that month in the region.
Larger domestic asset management firms were also reported having a relatively good year in the annual reports published by their parent banks in February.
In the words of Nordea CEO Christian Clausen, describing the universal bank’s group fourth quarter and full year 2012 results: “In 2012, we had more customers, more capital and higher profit than ever before. We are ahead of the plan that was established in 2011. On that foundation, we will shape the future of Nordea, with closer customer relationships, unchanged costs and increased return on equity.”
Nordea’s asset management business did well too. Clausen continues: “Fees and commissions from savings and investments increased 18% in the fourth quarter to €447m, mainly due to higher asset management commissions and life insurance commissions. Assets under management increased 4% to an all-time high of €218.3bn, following a net inflow of €3.1bn in the fourth quarter and positive development in the portfolios.”
The biggest local asset manager in terms of the share of AUM, Swedbank Robur, part of Swedbank, reported its 140-odd funds in its home markets and its asset management business accounted for 4% of the group’s total income in the financial year 2012, and 4% of profit before impairment.
Swedbank Robur is a microcosm of the industry in other ways too, as it consolidated 20 funds, closed down two, and launched four new products, including three ETFs.
Swedbank also identified priorities for 2013 that are likely to be reflected across the industry.
“New customer offerings will be delivered in 2013 in areas with high demand,” the bank said in its 2012 annual report
“Examples include so-called absolute return products, where the goal regardless of the stockmarket’s performance is to deliver a positive return to the investor, and multi-strategy funds, where the fund management company not only takes responsibility for selecting the securities but also for the distribution between asset classes and changes between them.”