A $10 Billion Norway Fund Tries to Stem Outflows With New Hires

Skagen AS is continuing its overhaul and picking new fund managers to stem an outflow of cash in a bet stock-picking will make a comeback as record central bank stimulus is rolled back.

Skagen reshuffled its portfolio managers in March with Skagen Vekst managers Ole Soeberg and Geir Tjetland resigning and Oyvind Fjell, who managed the top-ranked fund Delphi Nordic at Storebrand Asset Management AS, joining the team. Now, the company is looking to add another senior manager to its Kon-Tiki fund.

“The mantra of Skagen, the investment philosophy and processes, stand firm,” said Oyvind Schanke, the firm’s managing director, who joined from Norway’s wealth fund in February, in a phone interview on Friday. “It’s important to find the right people to lift that.”

Stavanger, Norway-based Skagen has seen its assets under management fall to 83 billion kroner ($9.7 billion) from about 130 billion kroner at the end of 2013, according to the Norwegian Fund and Asset Management Association. 

Skagen’s global and emerging markets stock funds grew quickly from the late 1990’s under its founder Kristoffer Stensrud. But in the past five years its funds have struggled as the Kon-Tiki, Global and Vekst funds, its three largest, underperformed their benchmarks. It even put itself up for sale in 2014.

Fund managers are facing a shift in demand away from stock-pickers toward passively-managed funds, Skagen said in a statement in January, when it announced it was cutting jobs through voluntary redundancies. Schanke, 48, joined in February from the Norwegian wealth fund, where he was one of three chief investment officers.

Schanke is now spying a shift, saying there will be more opportunities for active stock-pickers such as Skagen as central banks start tightening after almost a decade of easing. Less correlated markets could also benefit Skagen, while left-over stimulus will remain a backstop, he said.

“The markets will be strong,” he said. “There’s such an incredible amount of liquidity that’s chasing yield.”

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