Firm Profile: Asset Management Firm
A thirst to better understand how investors and consultants think and make decisions about manager selection led Sydbank Asset Management down the technology path to eVestment.
Sydbank AM, headquartered in Aabenraa, is Denmark’s fourth largest bank. Its asset management arm manages USD $12.5 billion (DKK 84 billion) on behalf of pension funds, foundations, and individuals, across a range of strategies covering developed and emerging markets, equity and debt, as well as multi-asset investments.
After hearing Danish pension fund, PFA Pension, talk about its manager selection process at an eVestment manager event in 2015, Sydbank AM’s Senior Institutional Sales Manager, Christian Farø, realised populating databases was crucial if the firm wanted to win and retain business both domestically and abroad.
“Understanding PFA’s process was a crucial learning and showed eVestment played a big part in its process. The message was ‘if you aren’t on the database, we are not going to talk to you.’ It was clear data was to be taken to a new level,” Mr Farø said. “eVestment is changing the game.”
To take the business to the next level, Sydbank AM moved to increase distribution of its data, and utilise competitor intelligence to improve how it was reaching investors and consultants outside its domestic market.
“The market was moving towards a more data-driven environment, and to expand across Europe we needed to invest in such a platform,” Farø said.
Farø believes databases drive transparency when it comes to manager selection and create a more even playing field for the market. By uploading data to eVestment and investing in eVestment’s Omni which provides clients with a service to help populate multiple industry databases, Sydbank AM has grown its reach outside the domestic market.
As a result, institutional investor clients of eVestment across Europe have invited Sydbank AM to participate in RFPs and tenders, providing it with the opportunity to scale the business.
Standing Out from the Crowd
Having access to the same database as consultants and investors has changed the way the Sydbank AM team approaches meetings. Farø describes having ‘more informed discussions’ as all parties are able to assess the competitor environment through the same lens.
“It’s not good enough to be good at performing anymore,” he said. “You need to know where you are placed in a competitive universe. The eVestment database helps consultants see through the smoke to find the smaller managers. eVestment has made us more conscious of explaining to clients how we are different from other managers.”
“Peer analysis is an important tool to show how we stack up. We can also show that our products are doing well despite being a small team. We are agile with competitive fees.”
Using eVestment to think like a consultant has paid dividends for Sydbank recently, not only for winning new mandates. It has also helped in retaining assets during a difficult market climate, and even in growing the size of existing mandates.
Recalling a recent client meeting where he was to discuss market turbulence and fund performance, Farø says he put
himself in the shoes of a consultant to better understand the client, and adopted an analytical approach to preparing for the meeting.
“By looking at the universe and the performance characteristics of managers similar to Sydbank AM, I discovered the median manager was placed below the benchmark. We were ranked in the second quartile but more importantly there was no consistent group of first quartile managers,” he said.
This analysis allowed Farø to differentiate Sydbank AM from peers and to demonstrate the portfolio had performed consistently and held strong. The client had also reached the same conclusion and not only was Sydbank AM able to retain the client, it increased the size of the mandate.
“The value of holding onto clients can bring much more value than chasing new assets,” concluded Farø.