SFF cuts SEB and Nordea mandates

SWEDEN- The Swedish Foundation for Strategic Research (SFF) has stripped Sweden’s two leading Swedish banks of the greater part of their mandates and handed it to three other managers in a drive to get better returns on its investments.

Bjorn Brandt, director of administration at the SKr 9bn (E982m) foundation said it had initially planned to remove the entire balanced mandates from SEB and Nordea. “We are not completely throwing out two our former managers but we have largely reduced their mandates.

“This means that SEB and Nordea who were important managers of our capital in Sweden have their portfolios reduced, so Nordea will only manage fixed income and SEB will only manage equities.”

SFF has split a SKr 550m Swedish equities portfolio between two new managers. Carlson Investment Management, owned by den Norske Bank gets a SKr 400m portfolio and Catella Capital, owned by furniture giant IKEA, gets a SKr 150m portfolio. The government-owned Kammarkollegiet will take over SEB’s bond portfolio.

Brandt said that SFF had chosen Carlson and Catella because they were dissatisfied with the index-the banks’ over-dependence on the index. “They have a style which fits the foundation’s philosophy which is more to have an absolute return, and to be less inclined to follow an index.”

Catella’s mandate is intentionally small, he said, although it could increase. “We want the Swedish managers to have relatively small portfolios in the sense that we do not accept more than 25 individual holdings in each portfolio. They will also be allowed to hold a relatively large amount in cash if they don’t believe in the equity market.

“We have had a tradition of transferring money between manager. So if a manager is successful its very probability that thy will have an increases mandate. This kind of change could take place at any time

Catella Capital was set up in 1995, when Catella acquired Mariegården Kapitalförvaltning. Two years It later created mutual fund manager Catella Fondförvaltning in cooperation with the Swedish banks Sparbanken Finn and Sparbanken Gripen. Catella Capital is now the parent company of Catella Kapitalförvaltning - responsible for instutional business – and Catella Fondförvaltning.

The Catella group is also active in property consultancy. Last month it set up Fountain Capita, a London-based investment management company focusing on real estate.

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