Storebrand Asset Management announces Q2 2022 business update

Business highlights:

• Net quarterly revenue of NOK 501 million (10% YOY growth)
• AuM of NOK 1,009 billion (NOK 28 billion YOY decline)
• Positive net flows of NOK 21 billion over past 12-month period, despite market turmoil in 2022

"We are pleased to see that existing and new clients continue to show faith in our ability to support them, as we move into the current high-inflation environment. There is now significant interest in value-oriented strategies and sustainable solutions, which contributed to good inflows"
- Jan Erik Saugestad, CEO Storebrand Asset Management

Financial overview and business development
Storebrand Asset Management generated net revenues of NOK 501 million in the second quarter of 2022, reflecting a solid 10% YOY growth relative to the same period last year, despite the turbulent context so far in 2022. The revenue growth in the quarter was driven by positive developments within our private equity solutions, as well as the effects of the Q3 2021 acquisition of Capital Investment.

Storebrand Asset Management recognized NOK 2 billion in net outflow, affected by market turbulence, ending the period with NOK 1,009 billion in Assets under Management (AuM). While Storebrand Asset Management experienced minor outflows, negative effects from financial market falls and rising interest rates had a larger impact on AuM in the second quarter.

Overall, the quarter was impacted by geopolitical uncertainty, inflation, increasing credit spreads and rising interest rates, driving market turmoil and uncertainty.

Despite the challenging context, Storebrand has experienced solid progress across many segments of the business. With global value stocks ahead of their growth equivalent and on track for a second consecutive year of outperformance, we are starting to see signs of investors returning to actively managed mandates, specifically value-based ones. For example, in May SKAGEN led the Norwegian Fund and Asset Management Association market overview, in terms of net sales among mutual funds.

Furthermore, we reached a major milestone in building a unified Storebrand Nordic offering, completing the rebranding of the former SPP Fonder, our Swedish asset management unit, to "Storebrand Fonder". With this change, we now offer a wider range of funds across multiple markets under the Storebrand brand identity.

Strengthened local Nordic partnership position
We have experienced increased interest for Norwegian domestic active funds, with Storebrand Norge and Storebrand Verdi recording net inflow of NOK 1 billion in the quarter. This follows closely on Storebrand Verdi's recent award in April for best Norwegian equity fund at the Morningstar Awards Norway 2022. 

In Sweden, our second largest market, Storebrand Fonder continued to have positive flows with SEK 5.6 billion accumulated through the first two quarters, once again beating the overall market trend.

Following a recent entry into the Icelandic market, Storebrand has been awarded a significant mandate for our ESG plus funds, to be invested in August. In addition, several mandates are in advanced discussions, with a significant total expected value.

Our Danish businesses recorded a modest net inflow of NOK 95 million in the second quarter. A healthy pipeline resulted in two new mandates, expected to be invested within the third quarter.

In the Finnish market, Storebrand and Aktia have now formally entered into a cooperation agreement for investment in Storebrand Japan and USA funds.

Through our infrastructure partnership with AIP, we closed a joint minority investment in the fully electrified fleet of Cross London Trains (XLT), in the UK. The investment aims to deliver stable long-term returns, while contributing to the sustainable energy transition by decarbonising Britain's rail stock.

Gateway to the Nordics
We have strengthened our services for clients in the Nordics during the second quarter, with the addition of a senior hire to our international team, two senior executives to our Norwegian institutional client team, and a senior analyst in Sweden.

Through our private equity boutique, Cubera, our private equity funds have committed approximately EUR 450 million across its primary and secondary investment strategies during the first half of 2022. Cubera was also newly acknowledged as a global leader and the standout European firm, with a sixth-place ranking in the HEC Paris-Dow Jones Performance Ranking of Private Equity Fund-of-Funds worldwide.

Within the real estate segment, we successfully completed several transactions in the second quarter, despite a market context characterised by a shift in investor sentiment based on higher inflation expectations and interest rates.

Sustainability leadership
With maximising positive impacts at the heart of our sustainability strategy, we continue to see interest for our sustainable investment solutions outside of the Nordics, notably with a major UK client having invested £260 million in Storebrand Global ESG Plus during the quarter.

Storebrand has co-led a shareholder group that successfully engaged with JFE, one of Japan's leading steelmakers, resulting in the company this May announcing enhanced climate commitments, spanning emissions reductions, shareholder transparency and links to executive remuneration.

Aiming to prevent an imminent collapse in nature's capacity to sustain life and commerce, Storebrand has been co-leading the Public Advocacy working group of the Finance for Biodiversity initiative. In June the group published a key position paper and led important pre-conference negotiation sessions in Nairobi, ahead of December's UN Biodiversity Conference (COP15) in Montreal.

Storebrand also continues to lead efforts to bring nature and biodiversity protection into focus for success in climate strategies, a point we helped highlight in our contribution to London Climate Action Week this June.

During the quarter, Storebrand's private equity boutique Cubera has newly brought onboard a seasoned Chief Sustainability Officer, to direct and integrate ESG activities across its current and upcoming fund-of-funds strategies.

The next instalment of our Sustainable Investment Review will be published in mid-August. Previous reports can be found on our website>>