Storebrand Asset Management Q1 2024 business update

Business Highlights

• Net revenue of NOK 601 million, including NOK 73 million of net performance fees
• Net outflow of NOK 4 billion in Q1
• Strong AuM growth to NOK 1 281 billion

Storebrand Asset Management recognized net revenue of NOK 601 million for the first quarter of 2024, including net performance revenues. Strong financial markets contributed to continued growth in Assets under Management (AuM).

The negative outflow is related to one client searching for a more tax-efficient solution and another choosing to insource their activities. The outflows were expected and communicated in 2023.

“We've begun the year on a positive note despite the expected outflows. Our assets under management have grown consistently over the years and we are privileged to have a loyal, long-term client base. There’s continued interest in alternatives, particularly private equity, with record sales outside the Nordics. Real Estate is also on the comeback, as evidenced in several new commitments”, Jan Erik Saugestad CEO Storebrand Asset Management.

Positive flows across the Nordics
The tides are turning across the Nordics, as high client activity is paying off and positive flows returning, particularly in Norway, Denmark and Finland. Institutional demand is strengthened, suggesting indications of adaptation to the new interest rate environment, with clients rebalancing and showing increased appetite for portfolio changes. These positive signals follow a tentative start to 2024.

During the quarter we won new Swedish institutional clients, through competitive tenders. We signed additional distribution agreements and won several large mandates for fixed income and equities, contributing to a growing pipeline, which bodes well for the coming months. Renewed interest for Swedish and Norwegian real estate resulted in significant commitments from institutional clients.

We were honoured to receive some additional positive feedback in the quarter from third party assessments. In March, independent research institute Morningstar recognised Storebrand Asset Management as Best Asset Manager in Denmark at its Awards for Investing Excellence 2024, based on the risk-adjusted performance of our funds. In Finland, Storebrand Fonder was also recognized as Best Europe Equity Fund in Finland in that country’s Morningstar Awards, for demonstrated superior risk-adjusted returns, consistency in performance, and excellence in long-term-oriented portfolio management.

Strong demand for sustainable investments and record sales in Private Equity
In Europe beyond the Nordics, we see continued strong demand for our sustainable investment solutions. On the passive side, we've observed a dual trend. While some existing passive investors are seeking to transition their assets to more sustainably managed funds, others who are actively invested are preparing for potential market corrections and seeking passive, liquid strategies for such scenarios.

For alternatives, particularly Private Equity, we've noticed an uptick in investor interest to these types of investments. This aligns with our private equity boutique Cubera's record sales outside of the Nordics, with our Nordic secondary fund, Cubera X, receiving particularly positive reception.

Regarding fixed income, we've begun to receive inquiries about Storebrand's offerings in this space. Clients seem to be exploring options as a precautionary measure, with an eye towards the stability of Nordic countries and their potential for decent returns, which presents an attractive alternative to domestic options.

In the Real Estate sector, positive market sentiment accelerated in the first quarter, as we noted more real estate transactions across the Nordics. Banks are reported to be more positive as they position themselves and trying to avoid shrinking loan volumes. We experience inflow of capital in Real Estate during the quarter, suggesting investors’ perception leaning towards a more neutral valuation going forward.

Our Nordic real estate Core Plus strategy, closed its first investment according to plan in March. The newly acquired logistics asset located in Sweden has been successfully onboarded to Storebrand’s management platform. The business plan is currently being executed with several planned sustainability measures, including instalment of solar panels on the roof.

A List for leadership in sustainability
In January 2024, Storebrand made it into the CDP's A List Europe for leadership in environmental transparency and action in activities related to climate. Globally, CDP evaluates more than 21 thousand companies on their environmental impact. In the Swedish market, Storebrand Fonder and SPP won the Söderberg & Partners "Sustainable Actor of the Year" award for commitment to, and performance in, sustainable investments.

To further increase our transparency, we have upgraded our voting procedures, to publicly disclose all our voting decisions five days in advance of shareholder annual general meetings (AGMs). This change is expected to send a stronger signal to companies we are engaged with, and to maximize the potential influence of our decisions on other shareholders.

Infrastructure is increasingly on clients' radar; due to the role it can play in the sustainability transition, its resilience in the high-interest-rate context, and benefits from inflation protection characteristics. In Q1 SAM initiated pre-marketing of a successor fund to Storebrand Infrastructure Fund (a EUR 1bn fund closed in 2022). Initial client feedback has been positive, and we look forward to extending the dialogue with investors over the coming months. The current investment pipeline is strong with several interesting investment opportunities in sustainable infrastructure.

Find more insights on our work on sustainability:
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