Nordic banking group Nordea has revamped its investment operations following the sale last year of its Nordea Life & Pension (NLP) business in Denmark.
As part of the overhaul it has brought together a 30-strong team, which it says could potentially have greater access to better investment deals and create stronger investment performance.
Nordea has been dealing with major changes to its pan-Nordic life and pensions business, NLP, in the wake of a strategic decision to sell the Danish part of the operation to the association Norliv, which is owned by NLP’s Danish customers.
Nordea is retaining NLP in Sweden, Norway and Finland.
Prominent NLP staff have also quit in the period, including the CIO of the Danish business Anders Schelde, who joined MP Pension as CIO, and Jesper Nørgaard, NLP group CIO, who left at the beginning of February to join Sampension as deputy CIO.
Thomas Otbo, head of liability-driven investments and head of advisory and trading for NLP group investments in Copenhagen, has now been appointed as one of two group CIOs at Nordea, heading up the investment department of the newly consolidated Nordea investment centre, alongside Helsinki-based group CIO Mats Hansson.
The new, larger investment centre will operate within Nordea’s wealth management division, which, in addition to the investment centre, also encompasses NLP, private banking, Nordea funds, asset management and digital wealth activities.
Eric Callert remains NLP’s group CIO, having been promoted to the job after Nørgaard’s departure earlier this year.
“The new investment centre will have 200 people in total, and we have created a very strong investment department with 30 people with excellent track records and best-in-class competences within asset allocation and investments across equities, fixed income and alternatives,” Otbo told IPE.
The investment team is much larger than NLP’s previous 10-person team and is pan-Nordic, including staff in all four of Nordea’s markets.
Otbo works in the group’s new Copenhagen offices in the modern district of Ørestad to the south of the city centre.
The new team manages and advises on almost €200bn of investments across private banking clients, NLP, and other Nordea clients.
While some parts of the investment reorganisation were triggered to some degree by the Danish divestment of NLP, Otbo said the moves would likely have happened regardless.
“Now we’re positioned inside wealth management, and we can serve more clients, [leverage] our strong strategic and tactical asset allocation framework and source the best investments,” he said.
This included ESG investments, he said, which would continue to be a major focus area.
“It has allowed us to simplify the process and get more scalability, getting more out of the same resources,” Otbo said. “When analysing and sourcing new investments, with this consolidated set up we effectively have both more resources and more size — and we can potentially access better investment deals.”
The current investment team consists of staff who were already working in the Nordea group, but the bank is now making “a few selective hires” from outside the organisation, he said.
Nordea Liv & Pension Denmark recently announced a rebrand under the name Velliv later this year, with its owner Norliv to be renamed Velliv Foreningen.
In Nordea’s interim report published today, operating profit for the bank’s life and pensions business within the wealth management division dipped to €73m in the second quarter of this year, down 28% from the same quarter in 2017 and down 21% from the first quarter of 2018.
The bank said this development mainly reflected the sale of the majority stake in NLP Denmark.