Asset manager

Legg Mason opening Stockholm office

Peter Andersson, head of Nordics and new markets (EMEA) at Legg Mason, talks about the company’s plan to set up a local office in Stockholm, which strategies are currently attracting the most interest among Nordic investors and the partnership with Jupiter Asset Management to host a 10K charity race in Stockholm.

Legg Mason is in the process of opening a local office in Stockholm to service clients in the Nordic region. 

“Just to be clear, we have applied to open the branch and it’s still subject to the approval of the Swedish regulator, which we of course hope to be imminent,” says Peter Andersson head of Nordics at Legg Mason. He continues: “I believe that success in this business comes from three things; first, quality of the investment proposal, second competitive fees and third a deep and mutually beneficial partnership. The first two are not location dependent but the third clearly is and so this is an effort to be closer to our clients to further enhance our relationships.”

Peter Andersson explains that the discussions about a local office have been on going for some time and that all agreed it made sense. He says it was of course important that his colleague Björn Persson, business development manager, Nordic sales, was willing to relocate to Stockholm from London, where the pair currently works. “The Brexit debacle also made the decision easier,” Peter Andersson says.

In the short to medium term, the plan is to eventually have two staff members in Stockholm plus Peter Andersson himself as a “fly-in from London” resource. “For now it’s just Björn on the ground and we will see how this develops,” he explains. 

When asked whether he expects to see more local offices being set up by other international fund groups in the near future, Peter Andersson says probably. “It gives you an edge, signals commitment to the market and makes life a lot easier as it pertains to client interaction. That said, there is of course a cost implication and our industry is under severe margin pressure so I wouldn’t expect a rush of managers setting up shop. We’ve also come off a pretty horrendous year for the asset management industry. In the UK I believe it’s the worst year on record as measured by flows so appetite for expansion may be subdued for some time,” he says.

Discussing which strategy or fund is currently attracting the most interest in the Nordics Peter Andersson says that by flows it is Legg Mason WA Macro Opportunities Bond Fund. 

“The portfolio manager took a strong contrarian view on US rates and inflation last year, which hurt during the year but he was proven right shortly after Thanksgiving, when Powell went ‘Dove’ on us, and is now back to winning ways. He stuck to his guns, clients stuck with him and a strong contrarian view paid off. Apart from that we are getting a lot of questions about our US real estate offering,” he says. 

In terms of trend among Nordic investors right now, Peter Andersson says that apart from the obvious search for yield and ESG they’re also getting a significant number of questions around the current economic cycle. “Most investors seem to agree that we are closer to the end than the beginning but then opinions divert as far as how close to the end we are. Notwithstanding that, many investors are starting to think about late cycle investing,” he says.

When asked if there is anything that Nordic investors are currently missing, or something they should focus more on going forward, he is quick to point to structured credit. 

“I’ve been banging the drum hard about structured credit for the last four years. Those that invested have had a tremendous run with risk-adjusted returns off the chart and although the most extreme valuation gaps may now be closed, or at least tighter, there are still so many interesting deals to do here. International real estate also feels a bit overlooked,” he says.

Discussing challenges, Peter points to the heterogeneous standards being applied within ESG. “I’m finding this quite difficult to navigate and clients must feel the same. Take Tesla as an example. Rated very highly by some agencies and given a terrible rating by others. It’s the same story with Wells Fargo; hero in one camp and villain in the next. Much greater efforts need to be made by these agencies to find a common language. Otherwise I’m not particularly concerned over the next 12 months. Beyond that though, I think a real challenge will be when to go defensive and how,” he says.

And on the topic of ESG, our conversation turns to the 10K charity race (The Race Against Plastic) Legg Mason is hosting at Kungliga Djurgården in Stockholm on Thursday April 11 together with Jupiter Asset Management.

“I’m certainly not your typical eco-warrior but I find it pretty hard to ignore what we’re doing to our seas. The amount of plastic that ends up in the seas is simply astonishing! However, we can absolutely do something about this. Rather than sit at home with ‘climate anxiety’ I’m more of a believer in doing something about it… so we will. Our elected charity, Plastic Oceans, is one of the pioneers in this field and they firmly believe that with the right action we can stop plastics reaching the oceans within one generation. I realise that this small effort may have a miniscule impact on the wider issue but that’s ok, because doing something small is infinitely more effective than doing nothing. And you get to come out and have some fun with great friends and colleagues and I promise that this is not a ‘pitch in disguise’! There will not be a pitch book in sight. This is all about the issue at hand, our plastic oceans,” Peter Andersson concludes.