Nordea Asset Management’s (NAM) Global Stars Equity Strategy has been awarded the prestigious Equities Manager of the Year 2024 from European Pensions Awards.¹ Portfolio managers Johan Swahn and Joakim Ahlberg commemorate its outstanding achievements over the past eight years.

Swahn and Ahlberg have successfully managed the strategy with three core goals in mind: outperforming the benchmark through enhanced long-term returns, meeting Nordea’s stringent ESG standards, and pursuing active ownership to improve investee companies’ ESG performance and governance.

“Investor perception towards ESG has come a long way in recent times. Only a few years ago, there was a widely held view that people needed to sacrifice returns in order to invest responsibly. Pleasingly, this misconception has since been thoroughly debunked,” Swahn says.

In running the Global Stars Equity Strategy, Swahn is joined by co-portfolio manager Joakim Ahlberg, as well as NAM’s Fundamental Equities team, a diverse and experienced group of over 30 professionals. With its innovative approach, the team has set a new standard in the industry, ensuring responsible investing without sacrificing performance.

The initial step in the team’s investment process is to undertake rigorous bottom-up fundamental analysis. “In this first stage, we seek out companies displaying substantial differences between our expectations and the market valuation,” Ahlberg explains. “The next step is to make assessments of a company’s strategic positioning, focusing on businesses with sustainable competitive advantages and considering the impact of various ESG risk factors, which are quantified in the final valuation model.”

However, the truly compelling aspect of the process behind the Global Stars Equity Strategy is the ESG integration and analysis. ESG analysts from Nordea’s Responsible Investments team, recognized by the CFI Awards² as the “Best ESG Team in Europe 2023”, are embedded in the portfolio management team and work alongside the managers. Their invaluable insights are ultimately factored into company valuations to ensure a 360º evaluation of selected holdings.

Each company within NAM’s Global Stars Strategy, as well as every potential new holding, is assessed on whether it conducts business responsibly in relation to its stakeholders – across employees, suppliers, customers, investors, the environment and society at large.

By adhering to NAM’s internal Responsible Investment Policy, the team excludes companies that breach international norms or are involved in unacceptable sectors, although exclusion is considered a last resort. NAM prioritizes active ownership, working proactively with companies to improve their ESG performance.

The power of active ownership

At NAM, active ownership efforts begin with voting on holdings, attending Annual General Meetings (AGMs) and representation on nomination committees. Nordea’s Voting Portal, publicly available to investors, shares our voting record at AGMs for stocks held across our investment solutions. This aligns with our goal to be fully transparent with clients.

Engagement is another key differentiator. “Having a constructive dialogue with the companies we invest in or that we are considering for investment enables us to understand how a company is thinking about and addressing ESG risks or opportunities that are relevant for its business,” Swahn explains.

The portfolio managers and RI Team together build an engagement roadmap. They see engagement as a way to preserve and enhance long-term shareholder value, as well as a great opportunity to create a positive impact for the broader society.

Learn more about the ESG Stars Approach here.