In a deal that has taken some eight months to complete, Swedish asset manager Öhman has by acquiring DNB’s Swedish fund business doubled its assets under management and has added critical components in its product line-up. FBNW has interviewed Öhmans CEO Johan Malm to learn more about the plans going forward.

By Niklas Tell | 2015-09-07

In June two years ago Nordic Fund Selection Journal sat down with Keith Skeoch, the CEO at Standard Life Investments, at the Horizon Deck bar at the Fairmont hotel in Monaco for an in-depth strategy interview. He stated: “Having more alpha pots mean I can do two things. First it means I will have strategies that I can sell new business on. It also means that I have more components to build better quality solutions.”

This statement explains the logic behind last week’s deal where Öhman announced the acquisition of the Swedish fund- and asset management business from Norwegian DNB.

In an interview in Fondbranschen (a magazine published by Tell Media Group between 2006 and 2012) in August 2012 Johan Malm, at the time the managing director at Öhman Fonder and today the CEO of the Öhman group, said that the aim was to increase assets under man-agement with increased sales and an expanded client group, but also through acquisitions. With the announcement on Monday, August 31, he has delivered on that thought.

Monday interview: Johan Malm

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“At that time I think we had some SEK 15 billion in assets under management and we have certainly delivered on the first aim as we had managed to grow the business to some SEK 39 billion in AUM before this deal,” Johan Malm says. “We have looked at a couple of potential deals before this but until now we haven’t done any acquisitions.”

The DNB deal will increase total asset under management at Öhman from SEK 39 billion to SEK 80 billion and involves Öhman taking on 28 employees and SEK 41 billion in assets. The number of funds will increase from 27 to 48 and the number of institutional clients will double.

Johan Malm has described the acquisition as a dream deal for Öhman. “The first contact was taken in the beginning of this year and as we looked deeper into the details it became clear that we are very complementary in terms of our offering, our competence as well as our clients,” Johan Malm says. “The companies are organised in a similar way. Both companies have a fund company as the base but also a company responsible for discretionary man-dates. But, where we have focused on individuals, DNB has focused more on institutional clients. It’s very complementary businesses.”

Technically it is an acquisition where Öhman buys the DNB business but Johan Malm stress-es that he will treat it as a merger of equals. One small, but potentially important signal in bringing both companies together is the choice of office.

“We expect the deal to close at the end of the year and both firms will then move into new offices at the corner of Mäster Samuelsgatan/Biblioteksgatan in central Stockholm. I think that is important that neither company moves into the others office. This will give the new compa-ny a great start,” Johan Malm says.

Looking at the product line-up the new combined firm will have a very strong fixed income offering where both Öhman and DNB have a strong line up of corporate bond and credit products but where DNB also have more traditional government bond products. The same goes for equities where Öhman has a large portfolio of passive products and where DNB primarily has active strategies with its roots in Carlson Investment Management. Some of its portfolio managers, such as Stefan Kopperud, the award-winning manager of Swedish small- and microcaps, have been with the firm for a long time.

Becoming a bigger company with an expanded product range will not automatically mean that the company is looking at expanding into new markets. Rather than geographical ex-pansions it seems more likely that the new company will work on bringing new products to markets.

“Sweden is big enough and we have much more to do here,” Johan Malm says. “In the near term we are not considering any geographical expansion. For us it is about offering our clients more and better products and product development is obviously something that we will look into going forward. Having said that, the focus in the near term is to bring these two companies together and ensure we keep our clients.”

The interview was originally published at www.fbnw.se. FBNW is a subscription based news and community service for people working in or with the Nordic asset management industry.