SEB Upgrades Flagship Fund to Article 9

    Stockholm (NordSIP) – Driven by client demand, SEB Investment Management decided to change the name and focus of the SEB Nordic Equity Fund to comply with the requirement of the Sustainable Finance Directive Regulation (SFDR) Article 9. The investment strategy which, until now, focused on the five Nordic countries and targeted mostly large and midcap companies will now also include a thematic angle. We reached out to Robert Vicsai who is one of the two portfolio managers responsible for the new version of the fund together with Caroline Forsberg. He tells us about the change of focus and provides some insights into the fund’s new thematic approach.

    “The fund will change from being an Article 8 to an Article 9 fund, which means that the it will have a sustainable investment objective,” Vicsai confirms. “The starting point of company selection will be the themes and meeting the desired outcome of the sustainable objectives within these themes and equitable returns.”

    “The new strategy will focus on four different themes that are essential for achieving global commitments that we are aiming for as a society, from a Nordic and European perspective,” Vicsai continues. “These themes are Energy Transition, Sustainable Mobility, Resource efficiency and circularity and Healthy societies.”

    Just like most sustainable fund managers, especially within the Article 9 category, Vicsai and Forsberg have to ensure that their sustainability goals and the implementation of their strategy are not misrepresented. When selecting companies with positive impact in mind, navigating between different and sometimes conflicting objectives can be challenging. For Vicsai, a longer investment horizon is crucial in order to resolve these conflicts.

    “We need to understand the outcomes of a specific company’s contributions, which stakeholders are affected, how vital these outcomes are to stakeholders, the relative contribution of a particular activity, and the likelihood of impact will be vital to every investment decision,” he says. “As I view it, social and environmental goals are seldom in direct conflict when you have a long-term societal or investment view. These indirect conflicts often arise when strategies, policies, and sector or individual company actions are misaligned between short vs. long perspectives, which we currently see in the energy markets.”

    As of today, energy stocks won’t be part of the strategy, but Vicsai is also particularly cautious about some segments of the retain market. “At the moment, anything that has to do with fast fashion (except recycling or waste management) would be un-investable for me. The business model is extremely challenging from many perspectives, not least long term profitability,” Vicsai warns.

    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA is Editor-in-Chief for NordSIP and Managing Director for Big Green Tree Media. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.

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