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Nordea severs Tokio AM link after Asia strategy underperformance

Nordea severs Tokio AM link after Asia strategy underperformance

Nordea has replaced Singapore-based Tokio Marine Asset Management International (TMAI) with its own in-house team on the management of a Asia-focused equity fund, saying the co-operation did 'not meet expectations', Citywire Global can exclusively reveal.

The Nordea 1 - Far Eastern Equity fund has been managed by Chiow Wei Lee, CIO of Tokio Marine Asset Management, since 2011. As of October 30 this year, the fund will be managed by Nordea's International Focus Equities (IFE) team.

'As our co-operation with Tokio Marine did not fully meet our expectations, we took the decision, after careful consideration, to appoint a new manager,' Nordea said in a letter to investors seen by Citywire Global.

This is the first time that Nordea, which operates a multi-boutique strategy, has taken an externally-managed strategy in-house.

The decision to end the partnership with Tokio Marine, which managed one fund on behalf of Nordea, was related to the fund's performance rather than any business-related issues in the partnership, a spokesperson at Nordea told Citywire Global.

'We have been looking for a replacement for quite some time but it is really difficult to find managers from that particular space who will work within an exclusivity agreement and so we saw the opportunity to give it to an internal team,' the spokesperson said.

Over the past three years to the end of August, the fund has returned 5.03% while its Citywire benchmark, FTSE World Asia Pacific ex Japan TR USD, has risen 28.14%.

The move to end the partnership with TMAI, the subsidiary of the $65 billion Japanese pension manager Tokio Marine Asset Management, comes as partnerships between European and Japanese asset managers are becoming more common.

These include Pioneer's partnership with Mitsubishi Group, DeAWM's partnership with Nomura Asset Management and developments in Edinburgh-based Standard Life's tie-up with Sumitomo Mitsui Asset Management.

Strategy change

The Nordea fund, originally launched in 1999, was taken over by Tokio Marine in February 2009 and was run by Hiroshi Yoh, then CIO and CEO of Tokio Marine, before he left the firm to join Janus Capital in 2011. 

The fund's top allocations as of June this year were towards companies listed in South Korea (21%), Taiwan (16%) and Hong Kong (16%).

With the change in management, the fund will be renamed to the Nordea 1 - Asian Focus Equity fund and will continue to invest in its existing universe but will also now be able to invest in Indian stocks, the letter told investors.

The IFE team, who will take over the strategy with $111 million in assets, already manage the Nordea 1 - Emerging Stars Equity fund, led by Jorry Rask Nøddekær.

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