The Fund Selection Blog

PensionDenmark and PKA Sign Record Investment in Off-Shore Wind Energy

The pension funds PensionDenmark and PKA (Pensionskassernes Administration) have come together to purchase half of the offshore wind farm from DONG Energy for approximately €804.6 Million.  The contract consists of operation and planned maintenance of the farm, for the 400MW Anholt facility in the Kattegat sea area.

"In DONG Energy we are proud of the recognition demonstrated by PensionDanmark and PKA, and their active participation in the transition to green energy production. We see this agreement, which is the latest in a series of similar partnerships with institutional investors, as recognition of DONG Energy’s position as market leader within construction and operation of offshore wind farms," says CEO Anders Eldrup, DONG Energy, in the company press release.

The 15 year contract is expected to become Denmark’s largest wind farm, with 111 wind turbine, and it is also expected to generate its first CO2-free power in 2012. By 2013-when the farm is complete- it is expected to generate green power to over 400,000 Danish households, which is equivalent to 4% of Denmark’s total electricity consumption.

Managing director of PensionDenmark, Torben Möger Pedersen, commented on the investment: "PensionDanmark provided the breakthrough in 2010 with the acquisition of 50 per cent of Nysted offshore wind farm. With the investment in Anholt offshore wind farm we are taking the next big step. Denmark is in the necessary transition towards renewable energy, which in this case is well united with an attractive return on our members' pension savings."

CEO Peter Damgaard Jensen, at PKA, also commented on the new acquisition, "PKA has for several years made climate part of its investments - also when it comes to infrastructure. We are off course doing this in order to make money to the members pension savings, but we also wish to take a social responsibility. The agreement with DONG Energy therefore fits perfectly into our investment strategy."

Swedish AMF Has High Returns

AMF pension had a total return of 9.8% and a total profit of 31.4 billion, making them among the highest in the industry. AMF has managed to yield the best returns within the last 15 years compared to other companies.

Ingrid Bonde, CEO of AMF commented in the company press release, ‘’It is a good thing  for us, as a company performing well and for our customers. The 2010's strong performance will especially benefit our customers because our owners refrain from profits for the benefit of our customers, under the reciprocal principles AMF run by."

AMF Group, which consists of the parent AMF, AMF and AMF Fonder AB Real Estate, manages a total of about 373 billion.

Key figures from the annual report (January to December 2010 Jan-Dec 2009)

Total return (%) 9.8 12.6

Management expense ratio, trade insurance (%) 0.17 0.18

Investment management expense ratio (%) 0.04 0.04

Premium income (million) 17 870 15 035

Solvency ratio (%) 244 230

The Group's comprehensive income (M) 31 413 48 974

Assets under management, trades Insurance (M) 307 882 282 842

For AMF Fonder managed funds (M) 64 810 52 170

Total assets under management (M) 372 692 335 012

 

Euroclear Appoints New CEO

Euroclear Finland appointed Anso Thiré as Chief Executive Officer (CEO) and Hanna Vainio as Deputy Chief Executive of the Finnish central securities depository (CSD), at Euroclear Finland. Thiré will be replacing Seppo Rantanen, who stepped down from the role as Chief Executive Officer of Euroclear Finland in January 2011. Vainio will be replacing Jouni Leinonen as Deputy Chief Executive Officer of Euroclear Finland.

Thiré will continue to serve as Chairman of the Executive Management Group of Euroclear Finland, as well as serve as  Chief Executive Officer of Euroclear Sweden. He will be responsible for the integration of both the Euroclear Finland and the Euroclear Sweden. Currently, Vainio is the head of product management for Euroclear Finland and Euroclear Sweden and is a member of the Executive Management Group of the two CSDs.

Thiré joined Euroclear in 1985 and since has held senior positions in finance, commercial, and strategic public affaris. Prior to joining Euroclear in 2006, Ms. Vainio was Vice President at Nordea Bank Finland and Head of Corporate Actions for several years.

Vainio is the Chairwoman of the Finnish Corporate Actions Market Practice Group, and has been an active member of various industry working groups that specialize in corporat actions,.

Frédéric Hannequart, Chairman of Euroclear Finland commented on the new appointments in the company press release: “Our new senior management team at Euroclear Finland have the vision and commitment to provide a post-trade infrastructure in Finland that will best serve our institutional and retail client needs. Changes and potential changes in the Finnish capital market require a strong management team that can deliver real and beneficial advantages for our Finnish clients, both domestically and internationally, now and in the future.”

SKAGEN and Labrusca Family Fund Sell Stake in Parmalat

Norwegian SKAGEN and Swedish Labrusca Family Fund both sold their stakes in the Italian dairy company Parmalat.

Recently, SKAGEN announced in their company press release, that they sold their stake in Parmalat, after owning a stake in the company since 2009. The shares were sold for approximately 50% higher than the purchase price, at a rate of 2.80 euros each to the French owned company Lactalis. After purchasing SKAGEN’s shares Lactalis, now owns 29% of parmalat.

Torkell Eide, a portfolio manager in SKAGEN Global, commented on the sell, ´´We want our shareholders’ interests being safeguarded in the best possible way. This means that we are aware of how companies are governed. The sale was considered in light of recent developments in the company. We think this is the best solution and are pleased with the price we have achieved.''

Labrusca Family Fund owned 6.3 % of Parmalat, and at the end of February the company sold their shares of the Italian diary company. The company did not provide any specifics, as to who purchased their shares.

Filip Weintraub, a Swedish manager who managed SKAGEN global from 2001 until 2010, and is now one of the founders of Labrusca Family Office AB, commented in the company press release,  "We are very pleased to say that we do not have the same size position today, after good performance of late.”

He continued by adding, ´´we have already identified a Japanese alternative within the sector where we have deployed capital."

 

Norway’s Leading Pension Fund Has Over €3.2 bn, In Environmental Assets

Norwegian Investment Bank’s Pension Fund Global has more than tripled their environmental investments. Last year the fund had NOK 7bn in environmental assets, and this year the total environmental assets totaled NOK 26bn (€3.2bn).  

Norges Bank Investment Management, the arm of the central bank which runs the fund, commented in their 2010 annual report. “The number of environmental mandates increased to nine at the end of 2010 from four a year earlier, and the assets under management rose to NOK25.7bn from NOK7.3bn.”

The nine environmental investments mandates are split between clean energy, water management and environmental technology.

 “They also tie in well with the fund’s role as a responsible investor, which includes safeguarding long-term financial returns through sustainable economic, environmental and social development,” NBIM states.

Mark Robertson, spokesman for London-based EIRIS, an environmental, social and governance research organization, said to Environmental Finance, that the Norwegian fund’s increasing environmental investment is part of a wider focus on green investment among institutional investors.

“We work with some of the world’s biggest institutional investment funds and, on that basis, it’s a trend we’re seeing, investors are considering not only the returns on environmental investments, but also the issues associated with climate risk and the reputational benefits of investing in greener companies.”

Storebrand’s 2010 Year Highlights

Storebrand published their 2010 Annual reports, and these are some of the highlights from the summary.

January 2010  Storebrand’s key account fund storebrand aksj inland has beaten the index for the tenth year in a row- alf inge Gjerde has managed the fun  the entire time

March 2010 Major SRI Conference Store brand arranges a conference on socially responsible investments for the ninth year in a row. Around 100 participants heard good ways of resolving the challenges business faces due to war and conflicts

August 2010 Delphi Norway’s managers achieve a fantastic 7,192 percent return over 23 years. Delphi is the clear winner among dine penger’s divers during this period the share portfolio , which was started with NOK 100,000 in 1987 , has today grown to NOK 7 million

September 2010 Storebrand qualifies for the Dow Jones sustainability index for the 12^th year in a row as one of the 10 percent most sustainable companies in the world

November 2010 Sotrebrand launches a new real estate fund, Eiendomsfond Norge. The fund will invest in centrally located, not  mortgaged, fully developed real estate with long term tenants.

Storebrand’s Share information (STB) 2010

Share price 31.12.2009 (NOK) 39.6

Share price 31.12.2010 (NOK) 43.6

Highest closing price 2010 (NOK) 48.3

Lowest closing price 2010 (NOK) 31.3

Change STB 2010 (NOK) 4

Change STB 2010 10%

Oslo Stock Exchange (OSEBX) 2010 18%

European Insurance Index (BE INSUR) 2010 2%

Number of shares traded 2010 (mill shares) 593

Turnover velocity 132%

Average daily turnover (mill shares) 2.4

Average turnover velocity 0.5

MCAP 31.12.2010 (NOK billion) 19.6

Number of ordinary shares (mill shares) 449

Lot size 200

Foreign ownership 31.12.2009 52%

Foreign ownership 31.12.2010 50%

Registred share capital (NOK billion) 2.25

Nominal value 31.12.2010 5

Swedish EQT’s Fund Selling German Kabel BW to American Liberty Global

EQT’s Funds IV and V announced that they will be selling their stake in Germna Kabel BW, the third largest cable network in Germany, to the U.S. media company liberty global, a total value of €3.160 million.

The Swedish  private equity group EQT has more than € 12 billion in raised capital and investment strategies.  Gunnar Asp, chairman of  Kabel BW’s advisory board and advisor to EQT, commented on the sell: “Kabel BW is one of the most successful companies in the European cable market, in terms of sales increase, profits, technology and services.”

He continued by adding,”We have from the outset fostered prosperous growth and developed the company as a benchmark for the sector. We are very glad that Kabel BW will in the future be part of Liberty Global Inc. which is one of the most innovative media groups worldwide and will offer a fantastic environment for further expansion so that the Baden-Württemberg customers will continue to benefit from the best services around.”

Norwegian SKAGEN Threatens Swedish PPM

Financial News reports that Norwegian SKAGEN has threaten Swedish PPM to change the way they manage their assets, or SKAGEN will remove its €800m funds from Sweden’s PPM pension scheme.

SKAGEN funds request that PPM stops churning within the pension scheme. This is not the first time SKAGEN places pressure on PPM.

Last October SKAGEN demanded that the pension scheme “implement measures to prevent major short-term fluctuation into and out of the funds with a short-time horizon”, a move controversial enough to warrant a five-minute slot on Sweden’s evening news.

According to a report published in November, Timothy Warrington, head of international, Skagen Funds, said: “The consequences are more administrative work which takes time away from the managers’ analysis work and increased transaction costs. Our focus on the long-term needs of our existing investors remains paramount.”

A spokesman from Skagen Funds, told Financial News: “Initially, this was a problem for smaller funds, but it has grown into such a problem that it is risking the whole system. Funds are not meant for quick trading, they are long-term investing vehicles.”

Read the full story through Financial News

Swedish Fund Management Companies Warned by FSA

Swedish Cicero Fonder AB and Stockpicker Asset Management AB have both been warned by the FSA, for their major deficiencies in their internal control. The FSA has also, issued a penalty fine of SEK 3.5 Million to Cicero Fonder, and SEK 250,000 to Stockpicker Asset Management.

Cicero received the warning and the fine for their lack of operational functions, and internal audit. The company also has issues with risk management and the management of their funds.

FSA claims that the company has insufficient diversification of risk for one of their funds, while another fund, the company has invested its resources in inappropriate ways.

Privata Affärer reports that Cicero has also taken steps to remedy the deficiencies and strengthening the organization and internal control.

Stockpicker received the warning and the penalty for their continuous erroneous fund investments. The company has placed one of their funds in an unlisted company as well as it has  not managed the risk of the fund, in a manner that is required by law.

Stockpicker reports that their making an attempt to strengthen their internal organization.

Morningstar European Funds Award Winners

Morningstar announced their European Fund Awards for 2011. The winners are selected by analysts that recognize fund managers throughout Europe who have demonstrated excellence within the past year, and have also proven to be great managers for shareholders’ capital. Morningstar presents the awards in two categories: Fund Manager of the Year: European Equity and Fund Manager of the Year: Global Equity.

The winner for 2011, include:

Morningstar Fund Manager of the Year: European Equity manager, Cédric de Fonclare for Jupiter European Special Situations

Christopher Traulsen, CFA, director of fund research for Europe and Asia at Morningstar, commented on the award stating, “Cédric de Fonclare is highly experienced and has a flair for bottom-up stock selection informed by a strong awareness of the macro environment. De Fonclare consistently applies a distinctive style, and has delivered for investors across different market environments during his tenure.”

He continued by adding, In 2010, he guided Jupiter European Special Situations to a return of16.03% (EUR), a top-quintile showing in the Morningstar Europe ex UK Large-Cap Equity category, while in 2008’s tumultuous market, he kept the fund’s losses less than 85% of its peers’. Over the course of his tenure, he has delivered strong performance for investors whilst limiting downside risk. He’s an excellent fund manager who fully deserves this award.”

Morningstar Fund Manager of the Year: Global Equity manager, Graham French for M and G Global Basics

Traulsen also commented on on Gragam French’s award, by adding “Graham French is a truly skilled manager who is clearly passionate about delivering excellent long-term returns to his investors. With more than 20 years at MandG, he has a level of experience that’s all too rare in the fund world, and is backed by a strong and stable team. His investment approach is long term and focused on selecting companies that allocate capital sensibly and are respectful of shareholders, which is consistent with his focus on creating value for fund shareholders as well as protecting their capital.

He continued, ‘’ In the MandG Global Basics fund, he seeks truly long-term opportunities in the building blocks of the global economy. As a result, the fund has a higher risk proposition as his themes can be out of favour at times, but French has the patience to ride out short-term underperformance, secure in his assessment of a stock’s ultimate potential. In 2010, French delivered a top-decile return of 32.39% (EUR) relative to his Morningstar Global Small/Mid-Cap Equity peers, and over the past decade, has handily outperformed that group, delivering a return that ranks in the category’s top 5.0%.”