Storebrand Asset Management Q3 2024 business update

• Net revenue of NOK 733 million, including NOK 90 million of net performance fees in Q3

• Net inflow of NOK 13 billion in Q3

• Strong AuM growth to NOK 1 347 billion

Storebrand Asset Management recognized net revenue of NOK 733 million for the third quarter of 2024, including net performance revenues.

Positive inflow and strong markets contributed to an increase in AuM. In total, AuM increased to an all-time high of NOK 1 347 billion.

“We have experienced solid inflows across the board, validating the strategic investments we have made in our multi-boutique model, allowing us to respond adeptly to our clients’ evolving needs” - Jan Erik Saugestad CEO Storebrand Asset Management.

Trend towards index funds continues
In Q3, conventional sustainable funds saw significant inflows, particularly in fixed-income and cost-efficient index strategies, across the Nordics and internationally. We attribute this success to our strategic positioning, enabling clients to capitalize on key market trends.

The first trend is the adoption of a "core-satellite" investment approach among clients, aimed at balancing cost efficiency with performance. This strategy involves building a core portfolio with broad index exposure, complemented by targeted satellite investments in very niche areas or sustainability-themed funds. During the quarter, we secured several new clients from continental Europe, driven by the demand for our strategies in these areas.

Secondly, the rise in regulatory requirements continues to challenge many clients. We play a pivotal role in helping them navigate these complexities, providing them both data and guidance on local regulations and broader frameworks such as SFDR and other sustainability regulations.

The third trend, evident across all markets—spanning both institutional clients and distributors —is the desire to simplify relationships by reducing the number of counterparts and partners they engage with. With our multi-boutique approach, we are an early mover well positioned to serve clients evolving needs through a single point of contact for a diverse range of investment products.

Growing appetite for alternatives
There remains strong demand for alternative investments in the Nordics, fueled by central bank interest rate cuts, a favorable transaction climate, and reduced over-allocation in unlisted markets. This trend is particularly evident in the successful fundraising for real estate in Norway and private equity, highlighted by the strong first close of the Cubera Collection and Cubera X.

On August 30th, Cubera’s secondary fund, Cubera X, had its final close, raising over EUR 800 million and oversubscribed the hard cap of EUR 780 million in external capital. The investor base for Cubera’s secondary strategy became increasingly institutionalized during the fundraising process, with more than 50% of the capital coming from investors outside the Nordic region.

The Nordic private equity market continues to be an attractive region, marked by significant growth in assets under management and the steady expansion of the secondary market in recent years. Our Cubera X fund has had a strong start, with over 25% of the total fund size already committed across seven Nordic secondary transactions.

Norwegian institutions’ demand for increased real estate exposure has continued growing through Q3. Our Norwegian institutional real estate fund, Storebrand Eiendomsfond Norge KS, has already secured commitments exceeding NOK 1 billion for 2024. We continue to explore additional asset acquisition opportunities through our Storebrand Nordic Real Estate fund, with market indicators suggesting increased activity, particularly in Denmark and Sweden, where interest rates are already are initially declining. During the quarter, we also acquired a prime commercial office building in Stavanger as part our diversification strategy.

At the beginning of October, Storebrand Infrastructure Fund and AIP entered into an agreement to acquire a stake in VALOREM, a leading French independent power producer. With this strong addition to the portfolio, the first vintage of Storebrand Infrastructure Fund has committed about 80% of its capital to nine sustainable infrastructure assets across various sectors in Europe and the US. Across the infrastructure segment, we have a robust pipeline of attractive potential investments.

Coordinated fundraising efforts for private equity and infrastructure, which we initiated across the Nordics in August and September, are expected to accelerate in Q4.

Setting the scene for sustainable finance at COP16
Storebrand is highly regarded as a sustainable investor. In the Nordics we are rewarded with high ratings by institutional investors in Prospera client surveys topping the Sustainable Investments category.

With the looming risk of biodiversity loss threatening both the environment and the economy, its reversal is crucial shared interest for society, interest of investors and businesses, and has consistently been at the top of our engagement priorities.

During Q3, through our central role in the Finance for Biodiversity Foundation, we contributed to successful completion of preparatory meetings ahead of the vital national-level negotiations of the COP16 conference later this month in Colombia. At COP16, Storebrand will actively participate in the negotiations and represent 177 financial institutions, advocating for a stronger enabling environment for business. By setting ambitious biodiversity action plans that improve disclosure and properly align capital flows, COP 16 can be another important step in winning the fight against nature loss.

For more insights on our work on sustainability:Sustainable-Investment-Review-Q3-2024.pdf