Roadshow organizers have largely underestimated Scandinavian investors in the past, but an opening up of major pension funds to international investment in Stockholm and Copenhagen means the region is gaining more attention.
The traditional attitude toward Scandinavian investors is that there are so few of them, a trip to the region is not worthwhile. Some IROs think: ‘Why not wait for the Scandinavians to come to us?’ But a ramping up of interest in investing in international companies and an appreciation of the value of Scandinavian pension funds has produced a busy few years for those who know the market well.
Revaluing the region
The Dresdner Kleinwort Wasserstein (DrKW) Scandinavian team has been busy, taking out between twelve and 15 pan-European roadshows in the last twelve months.
‘Scandinavia has been undervalued,’ says Patrick Mortensen, a director of pan-European equities at DrKW. ‘It is really pleasing to see an increasing number of companies seeing the opportunities and taking their management out there. What has happened is that companies have realized investors overall are very loyal – once you’ve persuaded them to invest they will stay with the investment for some time. I think some companies have not appreciated the equity culture that developed at the end of the 1990s when the pension funds started looking at non-Nordic equity.’
Anna Karin Källén, executive partner at Stockholm-based financial communications firm Hallvarsson & Halvarsson, comments, ‘We are a small country and throughout history we have had to be an outward-looking people. We are dependent on the world outside so we have always been well informed internationally. But now we are finding increasing interest from more US funds looking at investment abroad.’
Lynge Blak of Lynge Blak: Investor Relations in Copenhagen agrees. ‘In general many of the worldwide funds think Copenhagen isn’t of that much interest because of its size,’ he admits. ‘But pension funds are managing sizable funds. There are well-developed pension schemes here, and the proportion of savings is high.’
Adrian Rusling, managing director of roadshow specialist Kuhn Partners, has also noticed the sums. ‘There is more money being invested in international equities by institutions in Stockholm and Copenhagen than before, so it is certainly worth targeting investors there,’ he explains. ‘Some funds that were managing their international equities externally or through offices in London or New York have brought the management back home. There are some sophisticated fund managers with good knowledge of companies which makes for high-quality meetings if you target the right people.’
But there is a requirement that companies meet the management of any investment vehicle before they take the plunge, so although obviously some investors are willing to travel, you boost the odds of making a good impression if you make the effort to visit their neck of the woods. ‘There is a great interest in companies that come to visit the region,’ notes Mortensen. ‘The level of interest in mid-caps is extremely pleasing.’
Spot the difference
One of the great misconceptions about Scandinavian people is that because of their fantastic English skills and international knowledge, there aren’t any significant cultural differences between them and the British or Americans. However, there is a mass of subtle differences, not only between the Scandinavians and the rest of the world, but also within the region, and those with higher cultural awareness of this will generally win points.
Politeness and time-keeping are highly valued in Scandinavia, and are considered part of the professional working attitude, so it pays to be at your meetings on time. If you are unavoidably detained by ten or 15 minutes, you will be expected to explain your lapse.
Business attire is not as formal as in other parts of Europe. Some Swedish companies adopt a very casual approach to working dress and representatives may turn up to the most serious of meetings in casual clothing. Don’t misunderstand this – it does not signal anything less than a serious approach. The Danes tend to be suited but still are fairly relaxed.
When you are planning your trip one aspect that should definitely be considered is public holidays. Generally in Scandinavia there are far more than in the US or the UK – and often people take time off the day before or after the actual holiday. It’s advisable to stay away from these dates as well as the whole of July, which is traditionally the summer holiday month when Copenhagen and Stockholm are extremely quiet.
If you are looking to make the ultimate faux pas the worst thing you can do in Scandinavia is be showy or throw money around. Scandinavians do not appreciate status symbols such as private jets as they are perceived as wasteful. ‘I know of one company that lost an investor that way,’ says Ulrika Nisser, DrKW pan-European equity director with special responsibility for Sweden.
Danes and Swedes, like Scandinavians generally, tend to be fluent in English, so there are no language barriers to deal with. From your arrival at the airport down to the hotel reception staff you’ll find no problems with comprehension.
Henning Rostung, managing director of Danish IR consultancy Share, comments: ‘I think North American and other investors will find Danish investors and analysts very polite and easy to deal with, as well as open-minded. Unlike those they might deal with in Paris or Frankfurt we do not tend to observe formalities very much. Visitors will be very welcome and generally the attitude to them is very open and positive.’
Timing is everything
North Americans often consider the Scandinavian working day to be quite short, with executives arriving in their office between 8 am and 8.30 am and leaving pretty smartly at 5 pm, so they can pick up their children. In Scandinavia you are expected to be highly productive during working hours – staying later is often considered a sign of inefficiency.
Timing of presentations and appointments is, as always, important. If you are scheduling a breakfast meeting make it no earlier than 8 am. Crack of dawn New York-style appointments at 6.30 am do not go down well. Lunch happens around noon and one of the most popular presentation slots is around 2 pm. ‘But the last presentation should start no later than 4 pm,’ adds Blak.
Copenhagen is a small, compact city so getting around is pretty easy. Unless your CEO or CFO demands it, a car service is not necessary, as the taxis are reliable and clean, drivers speak English and payment can be made by credit card. Sometimes walking may be quicker than driving as Copenhagen is widely pedestrianized.
One of the must-see pension funds is ATP. Its offices are around 40km outside central Copenhagen, so you can either invite it to a group meeting in the city, or organize a separate appointment at ATP’s offices. Leave at least 45 minutes for the drive.
One tip, says Rostung, is to have the names of your contacts written down and correctly spelt, as your Danish pronunciation may be a little dodgy. Office receptionists usually know all the executives, but might have a hard time understanding your version of their name.
Over the water in Stockholm you might also not feel the need for taxis as the city is as compact as Copenhagen, so walking is often the best way to get around. Public transport is also excellent. Paul Herbert, a director at Hugin and a regular visitor to Stockholm, advises: ‘Never get a taxi from the airport – it costs a fortune. The train is fast and reliable.’
A tough audience
Group meetings are usually good, but it’s worth recognizing that Scandinavians generally don’t like to speak in front of large groups of people. ‘We usually do a handout followed by a formal presentation, then a Q&A,’ says Nisser. ‘With one-to-ones we usually ask if they want us to go straight to the Q&A or have a formal presentation first.’
Given Scandinavians’ reputation for straight talking and clarity, newcomers to the market should expect an extremely well-prepared audience that is unafraid to ask tough questions. It’s almost a matter of honor to have done detailed research. ‘Expect them to be very analytical and very well prepared,’ notes Nisser.
Ericsson’s IRO Hélene Rickeby agrees. ‘They will expect a very high level of disclosure,’ she notes. ‘Facts and figures are most important, and we are globally oriented.’
And try to get the tone right. ‘The Swedes take their jobs very seriously, but they do like a sense of humor and appreciate that kind of approach in a presentation – that will certainly make it memorable,’ advises Nisser.
‘Scandinavians can be very direct and some cultures can’t handle that and get prickly,’ warns Herbert. ‘The British often think they are under attack whereas the Scandinavians are just asking about problems and how they were handled.’
When you are putting together a presentation it’s worth considering who to take with you – a head of department might be appreciated and CEOs and CFOs are always welcome, but a very well-prepared IRO can also do the job.
The Danish look for a five- to seven-year growth story so they are often attracted to firms specializing in wireless, technology and pharmaceuticals. Swedish investors have more hedge funds – and they can go long or short. But Danish investors might well be interested in all sectors, says Blak. ‘The capital market is global. The sectors are global,’ he points out. ‘If something is hot in London, it is hot in Copenhagen.’
Traditionally, however, pharmaceutical and biotech companies have a good tradition in both southern Sweden and Denmark, with a number of pharmaceutical firms based in the area. Telecom has also been a sector that has provoked interest. ‘Because of the European networks doing battle, it’s been strong for many years,’ says Blak.
When it comes to the style of the meeting and who to take along, the main accent should be on delivery of information. There’s no point in having a meeting and just reading from your annual report. You need to be able to slip out of the formal presentation and discuss issues. ‘Open’, ‘direct’ and ‘transparent’ are watchwords.
Often, Scandinavians will require a lot of information about sustainability and environmental and social expectations. ‘If you are a paper company, for example, expect to be asked about where you get your wood from, your replanting policy and attitudes toward wastepaper,’ notes Blak.
Top institutions in Stockholm
| Investor name |
Equity assets ($ mn)
|
Investor type
|
| Robur Kapitalförvaltning AB |
20,806.02
|
Investment advisor
|
| SEB Asset Management (Stockholm) |
14,089.10
|
Bank & trust
|
| Swedish government |
13,300.97
|
Government agency
|
| Handelsbanken Asset Management |
11,817.01
|
Bank & trust
|
| Investor AB |
11,257.71
|
Holding company
|
| Första AP-fonden |
9,421.48
|
Pension fund
|
| Nordea Investment Management (Sweden) |
8,761.68
|
Bank & trust
|
| Vattenfall AB |
7,774.02
|
Corporation
|
| Fjärde AP-fonden |
6,959.56
|
Pension fund
|
| AMF Pension |
6,198.07
|
Insurance company
|
|
Source: Thomson Financial
|
||
Visitor information
Copenhagen
Where to stay:
Copenhagen Marriott
Kalvebod Brygge 5
Tel: 45 8833 9900
www.marriott.com
Hotel D’Angleterre
Kongens Nytorv 34
Tel: 45 3312 0095
www.remmen.dk
What to do:
Visit Tivoli Gardens, Copenhagen’s answer to theme parks.
Watch the sun go down in the old harbor.
Visit the Danish Design Centre.
Stockholm
Where to stay
SAS Royal Viking
Vasagatan 1
Tel: 46 08 5065 4000
www.radissonsas.se
Berns Hotel
Nackstromsgatan 8
Tel: 46 08 5663 2250
www.berns.se
What to do: Visit the 13th century squares in the old town.
Visit the Skansen Open Air Museum to see historic Swedish buildings.
Top institutions in Copenhagen
| Investor name |
Equity assets ($ mn)
|
Investor type
|
| Nordea Investment Management (Denmark) |
11,141.48
|
Bank & trust
|
| Danske Capital |
5,701.63
|
Bank & trust
|
| Nordea Invest Fund Management A/S |
2,946.84
|
Investment advisor
|
| LD Pensions |
2,549.58
|
Pension fund
|
| Carnegie Asset Management A/S |
1,744.67
|
Investment advisor
|
| BankInvest A/S |
1,330.82
|
Investment advisor
|
| Danish Government |
579.23
|
Government agency
|
| Lægernes Pensionskasse |
533.49
|
Pension fund
|
| AS Potagua |
439.93
|
Corporation
|
| DIP Danske civil – og akademiingenioerers Pensionsk |
400.00
|
Pension fund
|
|
Source: Thomson Financial
|
||
