Storebrand Asset Management announces Q2 2023 business update

Business Highlights

• Net revenue of NOK 483 million
• Net inflow of NOK 10 billion in 2nd quarter. 27 billion YTD.
• AuM of NOK 1143 billion - all-time high

Storebrand Asset Management recognized net revenue of NOK 483 million for the second quarter of 2023. Overall, results in the quarter were impacted by positively trending markets and the weakening of the NOK against most currencies. In the quarter, we experienced inflows totalling NOK 10billion, ending the period with NOK 1143 billion in Assets under Management (AuM), an increase of NOK 124 billion in 2023. The net flow YTD is 27 billion.

“In the current macroeconomic context of stubbornly high inflation and interest rates, we continue to focus on executing our strategy of growth in Nordic markets, where we were gratified to see strong faith from current and new clients, driven by our breadth of alternative strategies and depth of sustainable investment offerings”, Jan Erik Saugestad CEO Storebrand Asset Management.

Strong growth across Nordic markets
During the second quarter, Storebrand won several new mandates across the Nordics and Europe. The mandates covered a wide range of asset classes, including equities, fixed income, and alternatives such as private equity and real estate. This development was in line with the company's stated strategic ambitions.

The increased faith from Nordic clients resulted in new strategic partnerships, such as a mandate won in Finland at NOK 2.2 billion, and another in Denmark at NOK 1 billion. Progress was made in Iceland, with new inflows from existing client amounting to NOK 0.5 billion.

In Sweden, several new mandates were won and Storebrand Fonder recorded the second-best inflows in the market year-to-date (The Swedish Investment Fund Association). According to a recent survey from Prospera, Storebrand Asset Management now ranks as number 1 by institutional clients in Sweden and maintain its position as number 1 on sustainable investments. During the quarter there were some internal transitions in the executive roles in Sweden, where Mia Nyberg took up the mantle as CEO of Storebrand Fonder (Sweden), while Anna Jönsson was appointed CEO of the Storebrand Asset Management branch.

In Norway we continue to develop our institutional business and to strengthen our mutual fund distribution, we have now finalized a strategic distribution agreement covering a group of 24 local savings banks. We also maintained our first place Prospera ranking on sustainable investments among Norwegian distributors and institutional clients' position.

So far this year net flows from outside Norway and Sweden have been strong, amounting to NOK 13,4 bn. We are also experiencing positive flow from our captive pension business to the tune of 11 bn year to date.

Increased international client interest in Nordic solutions
Solid economic fundamentals in the Nordics have sparked interest in the region. During the quarter, we recognized positive flows into our Nordic equity strategies, and Cubera’s private equity boutique has so far raised in excess of EUR 630 million (NOK 7.4 bn) to its Nordic Cubera X fund. To promote our sustainable strategies, we held several roadshows in Belgium, Luxemburg and the Netherlands. In the UK, where our business is also progressing well, we have now launched an Emerging Market sustainable index strategy in both the Irish (CCF) and Luxembourg (SICAV) domiciles.

Within the real estate segment, we have closed additional asset management contracts and newly taken over the management of three local commercial properties in Denmark, to the value of NOK 2 billion. Furthermore, we expect to receive additional properties representing a value of NOK 5 billion the next half year.

High levels of sustainability engagement
In the quarter we maintained our strategy of high levels of targeted engagement to our commitments in active ownership, particularly with decarbonization of our portfolio and further integrating nature risk and impacts into our strategies.

Following several months of engagement , Nippon Steel committed to formal assessment of a shift from a blast furnace (BF) steelmaking process to an electric arc furnace (EAF), which could contribute to reducing its emissions intensity. This new commitment, in line with the expectations of investors and sets out a credible decarbonisation strategy and is expected to promote the long-term value of the company.

A multi-year engagement process with Toyota Motor came to a head at Toyota's AGM in June, when Storebrand, AkademikerPension and APG Asset Management, filed a climate lobbying-related shareholder resolution. Although the shareholder proposal ultimately was not passed at the AGM, it was widely noted and received pre-AGM support from many institutional, serving as a wake-up call to Toyota management to step up the pace on ensuring its competitiveness in an auto market impact by the transition to net zero.

At the end of the quarter the Nature Action 100 and its launching investor group released its investor expectations and corporate activities to support action on nature loss and mitigate financial risk. The initiative also unveiled the key sectors from which Nature Action 100 investors will engage companies. A final list of companies within these sectors will be presented later this year.

In the quarter we were vocal in our opposition to risk of permitting deep sea mining, based on the systemic risk it poses for investors. There is a growing recognition that a sustainable energy transition cannot be built at the cost of destroying nature. In our opinion, governments and companies need more insight before they consider commercial deep-sea mining. The current scientific consensus suggests that deep-sea mining would be highly damaging to ocean ecosystems, as well as permanently destroy invaluable carbon storage.

The next instalment of the quarterly Sustainable Investment Review will be published in late August.