Most UK investors, when they hear the name Nordea, might hazard a guess that it has links to the Nordics, but few would probably be able to tell you much about the company or its asset management business.
For Paul Malpas, head of UK wholesale distribution at Nordea Asset Management, his job is to try and change all that. Originally joining Nordea 11 years ago on the marketing side, in 2010 he was given the opportunity to take on the role of building up the UK part of the asset management business.
He explains: “There is a desire to gain market share here. The group is obviously a big Nordic bank that is very well known in the Nordics, but not really outside of that area. However, when you look at the top 10 banks in Europe, we’re in the top five. We are this big bank but no-one really knows us.
“At the same time, the UK market is a big area and the use of third-party funds is considerable. So obviously it is an attractive place to try and come and do business. We want to grow: either you’re in a growing business or you are in a shrinking business.”
It is clear that continuing the work of expanding the presence of Nordea is something Mr Malpas is enthusiastic about, having been with the Luxembourg-based asset management part of the business through its ‘identity crisis’ in the mid-2000s.
“Nordea Asset Management in Luxembourg went through a lot of change. We had a fund that was hugely popular, the North American Value fund, performance was fantastic and we got a lot of assets into that strategy. But it got too big and, as a result, the performance started to tail off and investors started leaving. That was a sort of identity crisis because we didn’t have any alternative products.”
This resulted in structural change with the company deciding to use the model from the North American Value fund, where it was an external manager white-labelled as Nordea, and implemented a multi-boutique strategy.
“Where we had internal teams based in Stockholm or Copenhagen, we told them to manage away from the benchmark within the Luxembourg Sicav range. Then we started adding external advisers. We went for the big asset classes first, a US growth fund, a European value fund and so on. So over the years we’ve been building the number of internal and external boutiques we have. We have approximately 67 funds in the range, so a much broader palette of products,” he explains.
An additional driver of the asset management business has been the decision to make the Luxembourg Sicav the preferred platform for new launches. In the past, if Sweden wanted an Africa fund they got permission from the regulator, got seed capital and launched it. But if Norway wanted a similar vehicle the process would start from scratch.
“It didn’t really make sense,” says Mr Malpas. “Now what happens is it goes to a product committee, a decision is made on the business case, it is launched in the Sicav and then we can sell it into the Nordics, but also the UK and the rest of Europe.”