Columbia Threadneedle wants a bigger piece of the Nordics

Asset Manager Columbia Threadneedle needs to crack the code on the Swedish institutional market and become better at explaining who they are and how they do things differently from the other asset managers swamping the market. This is the vision of new Head of Nordics, Ulrik Holm Oxfeldt, as told to FinansWatch AM.
Photo: PR
Photo: PR

It has not even been a month since Ulrik Holm Oxfeldt became Head of Nordics at the Columbia Threadneedle office in Hellerup in northern Copenhagen. But already now he has a clear vision of what his mission is over the next year.

"We are already very much present at the wholesale platforms in Sweden. We have done quite well in Denmark and Finland on the institutional market, but we could do more. Norway historically has been harder to penetrate," says Ulrik Holm Oxfeldt in his first interview after having taken over from Nina Movin at Columbia Threadneedle's Nordic office.

He points out that the Nordic Market is quite fragmented. A majority of the large Finnish institutional investors are internationally orientated whereas the medium-sized investors still have a strong relationship with the local Finnish managers. Norway has a history of being very closed-off around itself and the rest of Scandinavia, and hence targets managers like Danske Bank, Skagen, Nordea, and others, whereas as Sweden has been more open to foreign managers and Denmark has been open too.

"We have mandates in all of the Nordic countries, but the size and volume varies a lot. Sweden is potentially our biggest target market. Given the size of the Swedish market our footprint in the Swedish institutional market ought to be bigger. A lot bigger. Our strong position in Denmark is thanks to Nina Movin's hard work," Ulrik Holm Oxfeldt explains.

Columbia Threadneedle got its name in January 2015, when Threadneedle Asset Management and Columbia Management Investment Advisors, were merged into one by their American mother company Ameriprise Financial.

UK-based Threadneedle has its name from Threadneedle Street in London, the home of the Bank of England. Together they became Columbia Threadneedle Investments. A merger that, at the time, gave rise to one of the 30 largest asset managers, according to Financial Times.

The two businesses have not been merged as such, they are still separate entities, but their products and services are being co-branded.

Threadneedle was already acquired back in 2003 by American Express, which spun off Ameriprise Financial Inc. in 2005.

Today Columbia Threadneedle has USD 450 billion of Assets under Management of which approximately USD 320 billion are on the Columbia leg of the business and USD 130 billion are on the Threadneedle leg.

Columbia Threadneedle has been present in the Nordic countries since 2006.

But their presence in the Nordics needs to be even stronger, Ulrik Holm Oxfeldt stresses:

"If we look at whom we would like to compare ourselves to, then we're talking the big American companies like T. Rowe Price or Blackrock. Basically there is nothing that says that we should be smaller than they are in the Nordic countries," Ulrik Holm Oxfeldt says.

But how is Ulrik Oxfeldt planning to go about becoming equally large and get just as much airtime as the competition?

"The ambition is to break the code to the Swedish institutional markets within the coming 12-18 months. This is a cardinal point for me. Next we have to get out to an even broader audience in Denmark and Finland. And last but not least we need to get some more volume in the Swedish wholesale market by getting more recommendations from the independent financial advisors," Ulrik Holm Oxfelt explains.

Tell me why you are different

Columbia Threadneedle's image in the Nordics might be a little dusty and vague and therefore the ambition for the next couple of years is to be much better at explaining what the asset manager's strong points are, what it does better and differently than all the other asset managers present in the Nordics.

"We obviously need to tell people why we are better. And why we are interesting. Our performance is just as good as everybody else – in some cases better. And we are extremely advanced when it comes to ESG and SRI implementation," Ulrik Holm Oxfeldt explains and continues "In our company the ESG-people are an integrated part of the investment team, and thereby a part of the investment processes."

He points out that many asset managers also implement ESG criteria but the majority only do it on listed asset classes such as stocks. "We do it with all asset classes. Stocks, corporate bonds – both within investment grade, high yield, emerging markets debt space. We go all the way when it comes to implementing ESG."

Instead of just working with negative lists, engagement, and exclusion, one can get ESG and SRI screened products at one's own specific wishes, Ulrik Holm Oxfeldt explains. Now Columbia Threadneedle just has to tell that story in a louder voice to a broader audience.

Social bond funds and alternatives are next             

When asked what else distinguishes Columbia Threadneedle from all the other asset managers out there, Ulrik Holm Oxfeldt points to the company's latest invention: a social bond fund.

Back in 2014 Columbia Threadneedle was the first to launch a UK-based social bond fund and so far they are the only ones creating and selling a product with a conscious positive social impact.

Columbia Threadneedle believes this will be the next big thing in asset management.

"We all know what green bonds are by now, but social bonds are the new black and we are one of few offering it at this point in time," Ulrik Holm Oxfeldt points out.

Another thing that makes Columbia Threadneedle different from other Asset Managers today is that there are no alternative products on the shelf. Yet.

"We are operating in a sector where the mandates are becoming fewer and fewer, because a rising number of investors are managing assets in-house, a sector where a growing number of managers are battling over the same mandates and a sector were fees are getting lower and lower. This pushes us to optimize our organization so that we can deliver the best products at a low price. At the same time we are working on the co-branding of our two companies and launcing new products within the alternative investments. Products we haven't traditionally offered. So we are busy people, " Ulrik Holm Oxfeldt explains.

Offering new alternative investments are not something you just do overnight and Columbia Threadneedle has been working on this for a while.

"Alternative investments are the hot topic these days. And nobody's going to call you if you do not have this product on the shelf. One way of getting these kinds of products is by getting your wallet out and buying a specialist house and integrating the products into your own product assortment. That could definitely be a possibility," Ulrik Holm Oxfeldt says in a closing remark.

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