16 September 2008, Stockholm, Sverige
It’s all a matter of confidence
Catella Kapitalförvaltning is an independent asset manager – completely unattached from banks and stockbrokers – and offers asset management, discretionary management and asset allocation. Clients are primarily institutions and high net-worth individuals.
Interview the 8th of September with Mr Stefan Widenfelt, MD at Catella Capital and Catella Kapitalförvaltning.
How has 2008 been so far?
"To date, 2008 has been a year of consolidation to a certain extent. Needless to say, the underlying reason is the prevailing market climate, entailing a sharp decline in fund volumes. The reduction is due to a combination of large redemptions and falling values. Unfortunately, these substantial redemptions have also impacted on Catella Kapitalförvaltning. The redemptions are mainly due to institutional asset re-allocation, although individuals have also learned from previous mistakes and have been quick to redeem their capital. Even the previously so popular capital guarantee market has shed about 30 percent volume-wise compared with the first half of 2007".
And where has this capital gone?
"A good deal has been shifted into bank accounts rather than funds."
What's your forecast for the autumn?
"The market may well get worse before it gets better. Continuing concerns in the international credit market and the decline in global economic conditions mean that we must continue to live with considerable uncertainty throughout the autumn. On their hand, we are beginning to see signs that a turnaround may be on the way. Falling oil prices and a decline in inflation expectations may appease the Central Bank of Sweden. Thus, interest rate cuts should not be far off, leading to a positive trend in the stock market. Generally speaking, the stock market is about 9 - 12 months ahead of economic trends, and we are now seeing a number of positive signs. From Catella Kapitalförvaltning's perspective, we are hopeful about the future (looking a little farther ahead) and we expect positive flows as of the last quarter of 2008."
What needs to happen in our business environment to see a turnaround in the market?
"Apart from the points already noted, it is important that we see an end to the continual downgrading in analysts' forecasts. Although already discounted in current valuations, there is a certain psychology associated with this approach."
Does consolidation solely entail cutbacks?
"In this market it is important to be able to accelerate and brake. Catella Kapitalförvaltning currently has 19 funds in its offering. Our aim is to launch two new funds before year-end. One of these is the ‘Orion' activist fund, which attracted attention in the Swedish financial press a few weeks ago. Like all new product launches, we are dependent on finding sufficient capital to ensure the start-up. The other is a Nordic 130/30 fund, which permits 130 per cent exposure to the fund's ‘long' portfolio and 30 per cent exposure to the ‘short' portfolio. We're highly confident of this product and have employed a manager with Nordic expertise to strengthen the management organisation.
We've also been active in terms of sales activities. Two new sales people were recently recruited, who will primarily focus on direct-investment clients."
A vote of confidence from our clients
"Asset management is never an easy task and in the current market climate it's a real challenge. The key factor for managers is that they have the confidence of their clients. Our distinctive feature is that we act as an independent player using an active management strategy in the Nordic market. We want to win client confidence through our impressive performance, our independence of stockbrokers or corporate finance activities, and the appropriate size of Catella Kapitalförvaltning as perceived by clients. The fee structure is largely variable with a low fixed fee, which means the manager shares the same goal as the client. Employees are now shareholders in the company, thereby creating stability and commitment."
Catella Kapitalförvaltning in brief
Number of funds: 19
Number of employees: 52
Distinctive features: Active management in the Nordic market. A key ingredient is active ownership, which is exercised through the corporate nomination process, for example. Holdings for which Catella Kapitalförvaltning has been an active shareholder in 2008, and which gained the attention of the media include Bure (sale of one-third), Note, and Gant (a holding that has now been divested).
Noteworthy
Stefan Widenfelt, MD of Catella Capital and Catella Kapitalförvaltning, as well as being Board Chairman of Catella Fondförvaltning
Family: Married to Lena, who is a stylist/stage director. Their two ice-hockey playing sons are 17 and 19 years of age. The family includes a Labrador. Their home is located in the Stockholm suburb of Lidingö, where they have lived for nine years. They've spent their summers in Båstad for the past 20 years. Stefan is originally from Gothenburg, but grew up in Sweden, Canada and the US. He comes from a very sports-oriented family, with a mother and father who were top-class athletes. Personally, Stefan has competed at the top level in both long-distance skiing and rowing.
Interests: Fascinated by old houses, veteran cars and old boats. Plays golf (handicap 9.7), also interested in sailing, art and architecture.
Career: Graduate Business Administrator from Uppsala University. Worked at Alfred Berg during the period 1982 - 1991/92. Subsequently, launched the company Lendtech - which specialised in loans for stock investments. The company was bought out by OM in 1995. Worked at OM until 2004 in charge of the company's Corporate Development, as well as being Treasury Manager and CFO. Appointed as MD at Catella Capital and Catella Kapitalförvaltning in April 2004.