Storebrand Asset Management announces first quarter 2022 business update

Business highlights:

• Net revenue of NOK 470, with 5% year-over-year (YOY) growth
• 11 billion in net flows despite market turmoil
• AuM of NOK 1040 billion, with NOK 52 billon YOY growth of 5%
• New branch opened in Finland, Helsinki
• SPP Fonder's SEK 3 billion positive net flow bucked negative net flows in Swedish market

“The first quarter of 2022 was dominated by the war in Ukraine, with tragic scenes of suffering and loss incurred by victims. The worst humanitarian catastrophe to occur in Europe since World War II, it remains a highly disturbing and precarious situation, with significant effects on the global community reaching into the long term”

For the financial markets it was consequently an unusual and challenging quarter, driven by the fallout from the invasion of Ukraine. Despite the turbulence, we were able to support clients and generate solid results within the period."

- Jan Erik Saugestad, CEO Storebrand Asset Management.

Solid revenue growth despite turbulent market
Storebrand Asset Management generated net revenues of NOK 470 million in the first quarter of 2022, ending the period with NOK 1040 billion in Assets under Management (AuM).

The quarter was marked by extreme market volatility as a fallout of the Russian invasion of Ukraine, which drove significant macroeconomic shifts, a rise in geopolitical tensions and a new regime of sanctions. In direct response to the conflict, Storebrand has frozen Russian investments and made a decision to divest from Russia.

Net revenues for the quarter were NOK 470 million, reflecting a solid 5% YOY growth relative to the same period last year, despite the turbulent context of the first quarter of 2022. The revenue growth in the quarter was most significantly driven by YOY AuM growth and the effects of the Q3 2021 acquisition of Capital Investment.

In the first quarter, Storebrand Asset Management recognized 11 billion in net inflow, despite market turbulence. While Storebrand Asset Management experienced positive flows, negative effects from decreasing financial markets and strengthening of NOK affected AuM negatively. In today's high-inflation environment, value-oriented strategies experience strong interest and good inflows in the quarter, i.e. SKAGEN Focus.

Broader local Nordic presence
Storebrand Asset Management continues to build its position as local Nordic partner, with the March 2022 opening of its first Finnish office in Helsinki. We now have a presence in all four of the largest Nordic investment markets: Denmark, Finland, Norway and Sweden.

In Sweden, SPP Fonder has committed to rebranding as Storebrand Fonder, to align more closely with Storebrand's brand strategy. SPP Fonder had positive flows of SEK 2.8 bn in the quarter, beating the market trend: the Swedish Fund Association reported overall negative net flows of SEK 35 bn during the period. Storebrand Asset Management (Sweden) was also honoured with the Morningstar award for "Best Fixed Income House"

Storebrand's Danish business operations continue to grow considerably: since opening in 2020, Storebrand's AuM in Denmark has increased from NOK 700m (EUR 94m) to NOK 3.7bn (EUR 500m) as of the end of Q1 2022. A fivefold increase in Danish AUM in two years.

The development of Storebrand's local Danish presence continued with the recruitment of another senior client executive in March 2022.

Expanding as gateway to the Nordics
International and Nordic clients continue to demonstrate demand for Storebrand's offerings within alternative investments.

Cubera continues to deliver strong results across all its private equity fund-of-fund strategies, reporting a significant value increase in the first quarter. The most recent funds, including our International yearly vintage funds established between 2019-21, had a particularly strong quarter with a reported net internal rate of return (IRR) of 32%, driven by underlying value upticks and earlier-than-expected exists.

In the Nordic secondary private equity market, investment activity has been high and Cubera has progressed significantly with investments in Cubera Nordic Secondary fund IX. We are in the process of planning the next secondary fund vintage.

Within the infrastructure sector, one of Storebrand's highlight transactions of the first quarter was our investment and role in the acquisition of Fortum Oslo Varme, the largest district heating company in Norway with a 35% national market share, and comparable EBITDA of NOK 897m in 2021. The investment was made through our partnership with Infranode, along with the with City of Oslo-owned utility Hafslund Eco and Norwegian fund HitecVision. The strong sustainability profile of the investment is a signal example of our infrastructure investment strategy. The investment includes a carbon capture and storage project to eliminate Oslo’s largest emission source, a vital enabler in the city's goal of approaching carbon neutrality by 2030.

Fundraising for Storebrand Nordic Real Estate continues, and the fund is in the process of buying its first properties. These purchases will however not be disclosed before the ongoing DD processes are finalized. The focus on ESG within alternatives and real estate is growing, as tenants become increasingly aware that their corporate image is connected to the building they sit in.

Continuing its pioneering role in sustainable investment
Fundraising in Cubera's first dedicated Impact fund-of-funds strategy is gaining strong interest from institutional investors across the Nordics and Europe.

In February, Storebrand launched Storebrand Equal Opportunities, an Article 9-classified fund investing in companies well-positioned to solve pressing social needs, such as women’s health, as identified in the UN Sustainable Development Goals (SDGs). The new fund is part of Storebrand’s series of SDG-themed Solutions funds. At launch, the fund is initially available in Norway and Sweden.

Storebrand has been leading collective efforts to document and manage the impact of business activity on nature's capacity to support life and economic value creation. A key component of this effort, the Nature Action 100 (NA100) investor initiative, has been announced to launch later this year, with Storebrand a leading member in establishing the initiative.

Storebrand was recognized as "Equity Manager of the Year" at the prestigious LAPF (Local Authority Pension Fund Forum) Investments Awards for its work on sustainable investment and climate risk with UK LGPS schemes.

Closing out the quarter, Storebrand was honoured in March to be officially recognised as a signatory to the UK Stewardship Code, one of the country's most stringent standards for commitment to investment stewardship.

More information our work on sustainable investments and active ownership can be found in our quarterly report Sustainable insight Q1>>