How Is Storebrand Asset Management Thriving Through Sustainability?

October 23, 2024

Storebrand Asset Management, a prominent Nordic financial group, has been making waves with its robust financial performance and strategic positioning. Their Q3 2024 business update reveals a focus on sustainability that transcends simple greenwashing, diving deeply into long-term, impactful investments. This strategic alignment with sustainable practices not only bolsters their financial metrics but also positions them as a leader in the evolving landscape of responsible investing. Storebrand’s approach to sustainability is not just a marketing strategy; it’s a fundamental part of its operating philosophy, integrating environmental, social, and governance (ESG) considerations into every aspect of its business model. By aligning its goals with sustainable practices, Storebrand aims to achieve not just financial success but also contribute positively to the environment and society.

Strong Financial Performance

Storebrand reported an impressive net revenue of NOK 733 million for the third quarter of 2024, which includes NOK 90 million garnered from net performance fees. This financial feat was further buoyed by a net inflow of NOK 13 billion, a clear testament to their efficient management and strategic foresight. As a result, their assets under management (AuM) have surged to a record high of NOK 1,347 billion, underscoring the firm’s robust market position. This outstanding financial performance came alongside a positive reception from clients and investors alike, who appreciate the credibility and reliability that Storebrand brings to the table.

CEO Jan Erik Saugestad emphasized that the firm’s strategic investments in their multi-boutique model had been pivotal. This model allows Storebrand to respond swiftly to the evolving demands of the market and clientele, providing scalability and aligning various investment strategies under a unified approach. This structure not only enhances their service offering but also reaffirms their leadership in the market by showcasing their ability to adapt and thrive. The multi-boutique model reflects an innovative, client-focused approach where diversified investment strategies merge seamlessly, creating a cohesive and efficient experience for investors.

Embracing the Shift Towards Index Funds

A significant trend contributing to Storebrand’s success is the increasing client interest in index funds. These funds are integral to a “core-satellite” investment strategy, where a stable core of broad index funds is complemented by satellite allocations to niche or sustainability-themed investments. This investment approach delivers cost efficiency and the potential for outperformance, striking a balance that is highly attractive to a growing number of investors. By blending broad market exposure with targeted, high-impact investments, this strategy aims to maximize returns while managing risk effectively.

Client interest in these strategies has surged across Europe, driven by the dual benefits of lower fees and ESG-focused returns. Storebrand has capitalized on this shift by offering tailored solutions that align with these modern investment preferences. The firm’s ability to adapt and cater to this demand demonstrates its forward-thinking mindset and commitment to staying ahead of market trends. Client demand for such investment products reflects broader shifts in investor priorities, with a growing focus on cost efficiency and sustainability in investment decisions.

Navigating Regulatory Complexities

In an era where regulatory environments are continually evolving, Storebrand has distinguished itself by providing expert guidance to its clients. The introduction of the Sustainable Finance Disclosure Regulation (SFDR) and other mandates has added layers of complexity to the investment landscape, necessitating a thorough understanding and robust compliance mechanisms. These regulations aim to foster transparency and guide capital towards sustainable investments, posing both challenges and opportunities for asset managers.

Storebrand stands out by offering invaluable data, insights, and guidance to help clients navigate these regulatory intricacies. Their ability to demystify complex regulations and provide clear, actionable advice enhances their value proposition. Through comprehensive data-driven strategies, Storebrand ensures that clients remain compliant while achieving their investment goals. This proactive approach to regulatory compliance not only builds trust with clients but also reinforces Storebrand’s commitment to transparent and responsible investing.

Simplifying Client Relationships Through Multi-Boutique Model

The multi-boutique model employed by Storebrand is not just about diversification of investment options; it also significantly simplifies and enhances client relationships. In the current investment climate, businesses and high-net-worth individuals prefer to streamline their dealings, reducing the number of counterparties they engage with. Storebrand has efficiently tapped into this preference by offering a diverse range of products and services through a single, consolidated point of contact.

By minimizing redundancy and enhancing client convenience, Storebrand’s multi-boutique model offers a seamless investment experience. This approach is particularly alluring to clients who seek streamlined solutions without compromising on variety, performance, or innovation. The consolidation of services under one umbrella allows for a cohesive, well-coordinated strategy that addresses various investment needs more effectively. This streamlined approach not only builds stronger client relationships but also promotes operational efficiency, benefiting both Storebrand and its clients.

Robust Demand for Alternative Investments

While traditional investments have always been a staple, the surge in demand for alternative investments like private equity and real estate has been particularly notable for Storebrand. The firm’s Cubera Collection and Cubera X private equity funds stand as prime examples of their ability to tap into this growing market. Having successfully raised substantial capital, these funds have committed resources to high-growth opportunities that promise substantial returns.

Cubera X, for example, raised more than EUR 800 million, underscoring strong market confidence and investor interest in Storebrand’s alternative investment offerings. With over 25% of its total capital already committed across seven secondary transactions, Cubera X exemplifies a proactive and strategic investment approach that maximizes opportunities. Storebrand’s ability to attract significant investment in these funds highlights its prowess in identifying and capitalizing on lucrative alternative investment opportunities.

Expanding Real Estate Portfolio

Storebrand’s foray into real estate investment continues to show significant promise, particularly within the Nordic region. The Storebrand Eiendomsfond Norge KS fund has successfully secured more than NOK 1 billion in commitments for 2024, which underscores the robust institutional demand for real estate assets in Norway. The consistent performance of this fund exemplifies Storebrand’s strategic acumen and strong market presence in the real estate sector.

Moreover, Storebrand’s real estate strategy also extends beyond Norway, with active explorations in Denmark and Sweden. These efforts are supported by favorable interest rate environments, which facilitate attractive acquisition opportunities. This regional diversification strategy not only mitigates risks but also taps into dynamic real estate markets that offer significant growth potential. By expanding their real estate investments across multiple Nordic countries, Storebrand aims to build a diversified and resilient portfolio that can withstand market fluctuations.

Strategic Infrastructure Investments

Another significant facet of Storebrand’s sustainability strategy is infrastructure investment. The Storebrand Infrastructure Fund has achieved noteworthy milestones, particularly with investments in projects like VALOREM, a French power producer dedicated to sustainable energy solutions. These investments underscore Storebrand’s commitment to sustainable infrastructure, aligning financial returns with long-term environmental impact. Investment in sustainable infrastructure is not just a strategic move but also a societal commitment, impacting the broader community positively.

With about 80% of the first vintage fund’s capital committed to nine diverse infrastructure assets spanning Europe and the United States, Storebrand has demonstrated strong market penetration and commitment to this sector. These infrastructure projects are earmarked for their potential to deliver both financial returns and sustainable impact, providing a clear pathway for responsible investing. Storebrand’s dedication to integrating ESG criteria into its infrastructure investments reflects its broader commitment to sustainable and impactful investment strategies.

Leading Sustainable Finance and Biodiversity Efforts

Storebrand’s influential role in sustainable finance is further underscored by its active involvement with the Finance for Biodiversity Foundation. Their engagement ahead of the COP16 negotiations in Colombia showcases their dedication to advancing biodiversity action plans. By advocating for comprehensive biodiversity measures and improved disclosure standards, Storebrand aims to align capital flows with global environmental objectives, reinforcing their leadership in sustainable investing.

This proactive stance on biodiversity reflects Storebrand’s broader commitment to responsible investing and sustainability, making them a model for peers in the industry. Their efforts not only support global environmental goals but also build a strong, future-proof investment framework that resonates with conscientious investors. This dual focus on sustainability and profitability ensures that Storebrand remains at the forefront of the responsible investing movement, setting benchmarks for industry standards.

Coordinated Fundraising Initiatives

Storebrand’s strategic focus on fundraising, especially in private equity and infrastructure, is set to significantly boost their capital inflows in the fourth quarter. This focus aligns with their broader investment goals, strengthening their standing in the market. By coordinating fundraising efforts across various asset classes, Storebrand effectively maximizes their resources and optimizes investment potential.

This approach not only enhances the fundraising process but also ensures efficient capital deployment toward high-impact investment opportunities. Storebrand’s ability to attract substantial capital emphasizes their credibility and the trust they command in the investment community. As they advance these efforts, Storebrand is well-positioned to seize emerging opportunities, reinforcing their status as a leader in the asset management sector.

Storebrand Asset Management’s Q3 2024 business update highlights a company at the pinnacle of its strategic and operational prowess, marked by strong financial performance, innovative investment strategies, and a steadfast commitment to sustainability. Their performance demonstrates how integrating sustainability at the core of operations can lead to thriving business outcomes. Storebrand’s multi-boutique model, strategic investments, and proactive approach to regulatory challenges contribute to a well-rounded, competitive edge that distinguishes them in the market. As Storebrand continues to adapt and evolve, their focus on long-term, impactful investments ensures they remain a leader in the ever-evolving field of responsible investing.

Subscribe to our weekly news digest.

Join now and become a part of our fast-growing community.

Invalid Email Address
Thanks for Subscribing!
We'll be sending you our best soon!
Something went wrong, please try again later