Nordea eyes global fund management expansion

Wed Jun 29, 2011 9:31am EDT

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By Cecilia Valente

MONACO, June 29 (Reuters) - Scandinavian group Nordea's funds unit is seeking to grow assets up to 5 percent this year by winning clients looking to prevent the erosion of their wealth by inflation, its chief executive said.

Allan Polack, head of Nordea Asset Management, which has 192 billion euros under management, said the firm aimed to expand internationally and compete with global management houses with its global equity and emerging markets products.

"I think we will pop up more on global institutional radar screens. We are becoming more international: coming originally from the Nordic region, being then European, being international now. We will be recognised more, and this is what we are working on," he said on the sidelines of the Fund Forum event in Monaco.

Nordea is looking to capitalise from a greater willingness among investors to push into higher risk products as they scramble to protect their wealth as inflation runs well ahead of rock-bottom interest rates.

"Inflation is a challenge for investors; it is difficult to get real returns without taking risks, so we have to guide our clients to get well-diversified, controlled risk," he said.

"One of the areas is credit. We think it is very important for our risk-averse clients ... We also think it is important to get exposure to alternatives. It does not have to be a fancy hedge-fund strategy; it can be a low-risk absolute-return product," he said.

He said niche investments such as farmland and forestry were further components to a diversified portfolio.

"We see a clear interest in these two areas. We are working on that, with real estate also being a building block," he said.

Environmental, social and governance (ESG) criteria investments are a further growth area for the firm.

"The emerging markets are maybe the area where it is most difficult to handle the ESG challenge," he said.

Nordea has just launched an ESG emerging markets fund, hoping to raise up to 400 million euros in the Nordic region with a view to export this product outside the region.

"The more affluent ... of our clients are actually very keen ... The retail client, private banking client likes it because it (sustainable investment) aligns with their mindset," he said. (Editing by Christopher Vellacott and Will Waterman)

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