Danske Capital bought Finnish asset manager Mandatum last year. What are your plans for the Nordic region going forward?

When you look at our market share, we have a very strong position in Denmark and Finland, but are relatively small in Norway and Sweden. But that’s quite natural, since we’ve grown out of [Danish] Danske bank, which bought Finnish Sampo bank and Mandatum last year. We previously had a small niche business in Finland, but now we have become a leading player in that market.

In Sweden and Norway, we’ve had to build up the asset management business from scratch and that takes time. We have bought some smaller banks, but they didn’t have any institutional business.

So we still have a long way to travel outside of Denmark and Finland, especially in Norway. We simply aren’t seen enough among Norwegian institutions.

Has it been particularly difficult breaking into the Norwegian market?

No, I think it‘s more a matter of coincidence as to why we have done so well in Sweden compared to Norway. What really raised our profile in Sweden was our mandate with AP 7, which attracted a lot of interest from other institutions and really helped us. It’s easier getting a dialogue with other investors now.

We have also put a lot of effort into Finland. Integration takes a lot of time when you acquire a bank, and since we are quite religious about our platforms the first thing we do is integrate the IT system, which is a huge and very complicated task.

What about your business in the rest of Europe?

We’ve had increasing sales in the German-speaking part of Europe in terms of alpha products. Our deal-breaker has been our eastern European expertise, and we are now building up our distribution.

Our plan has been to focus on building up external distribution in Germany, which we hope will go fairly quickly, but to also start breaking into the institutional market in Europe. But that’s a much longer process and we do that via consultants. We have attracted our first customers and I believe we are beginning to break though in the institutional market. Our quickest success, however, has been through the distribution of funds.

In the rest of Europe, where the bank is not active, we will sell our alpha competence to a few large institutions or use other people’s distribution.

Are you launching any new products?

We have started up one European equity hedge fund and one European credit hedge fund and will hopefully start offering them to clients by the end of the year.

Offering hedge funds is a way of making the most out of our competencies and quite an important investment area. We decided to take our skills and implement them from a long-only to an absolute return environment. We first launched two fixed income hedge funds based on fixed income strengths.

But our hedge funds are also a result of the restructuring of our business. We didn’t have any hedge funds before the restructuring, which we implemented in 2004. First we decided to focus on certain business areas and then we thought of how to deepen our offerings in these alpha areas.

So what changes did you make to your organisation and why?

We had a hard look in the mirror and asked ourselves – in which areas are we really competitive and where will we never be? We previously thought we could invest anywhere and had skills everywhere, and that wasn’t the case.

We have a very simple mission: return on knowledge. That goes for all of our three business areas. I tell our employees that we are all in one business: the return business and delivering positive returns is everything. And that’s why we had a look at our competences and where we could deliver world class returns to our clients.

We decided that we needed to stop playing in fields that are tilted against us. The Nordic region was an obvious choice for us but we took a bit of a chance with Europe. It was a strategic decision and maybe not in our favour at the time, but without a strong European competence we couldn’t claim to be a leading Nordic player. That was very important.

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