Ferd Invest takes a Nordic-wide approach
Until the end of 2009, Ferd Invest operated three separate portfolios: one portfolio for shares listed on the Oslo stock exchange, one portfolio for Swedish listed shares and a separate portfolio for shares in small and medium-sized companies across the Nordic region.
“We found it increasingly unnatural to exclude the stock markets in Copenhagen and Helsinki, so I am delighted that our investment mandate now includes these markets”, explains Alexander Miller, Director - Ferd Invest.
A single portfolio
Bringing together the three separate portfolios into a single Nordic portfolio has also dictated a change in the performance target for Ferd Invest: rather than aiming to beat the benchmark indices for each of the three portfolios separately, the business area’s results are now measured against a combined Nordic benchmark index.
“This gives us more opportunities, both in terms of picking attractive shares and in terms of our strategic positioning relative to industries and market trends – and we now have full flexibility in how we choose to invest”, says Alexander Miller. He goes on to add that this flexibility is very important since the Nordic stock markets differ in their composition, and therefore react differently to changing times and trends.
“By approaching all the Nordic markets as part of the same portfolio, we can make more effective use of the opportunities we identify. This increases the potential to achieve a high overall return over the longer term”, he says.
Large investment universe, fewer investments
The switch to a single portfolio has not resulted in any major changes to the way Ferd Invest operates. The three members of the business area’s team will continue to overlap with each other in most areas, reflecting their view that it is easier to shake out good ideas when everyone is working with the same information so that each can build on the other’s ideas and suggestions.
“For every company that we choose to invest in, we analyse a lot that we decide against, and the number of companies we consider will increase further with our broader investment universe. On the other hand, we intend to reduce the total number of investments from something over 30 to between 10 and 20. It is the work on monitoring the companies where we have decided to hold shares that takes the most effort”, explains Alexander Miller – who therefore does not expect to have to recruit any additional staff to deal with the expanded investment mandate.
“In addition, both portfolio manager Gaute Garshol and I have worked a lot with Nordic shares earlier in our careers, so we already have the necessary Finnish and Danish expertise in-house,” he adds.