Insurance companies’ asset management units do not tend to attract attention. Although they are big investors, they find themselves in the shadows of pension funds that are constantly measured and monitored in terms of returns, costs and agendas.
Firstly, insurance companies invest because they hedge insurance reserves – primarily through bond investments. Secondly, they seek to strengthen their own funds, and more free portfolios allow them to invest in equities, corporate bonds, and alternatives.
While companies invest in accordance with their own recipe and risk appetite, outsourcing is a general trend. In-house specialists for direct investment would be too costly for especially smaller companies, so most opt for external asset managers and funds. Investment teams and managers are often un-specialized people seeking specialist market know-how.
GF Forsikring is no exception. The company has a team of three full time employees and about EUR 600m in AUM of which about half is allocated Danish bonds, 34 percent international bonds, 12 percent equities and just over 4 percent real estate.
"We don’t prefer big or small managers. We always do an individual, holistic assessment. Most importantly, the manager has to prioritize us as a customer, proving the service we require,” GF Forsikring Head of Investments Sarah Vingaard explains to FinansWatch.
"The strategical and tactical allocation is anchored in GF. The board draws up the strategy, and the investment division works with management to select the building blocks and assets, and decide on the distribution,” explains Vingaard, adding that the choice of a manager is always rooted at GF.
"Before making a decision, we always assess whether we need someone else for bouncing of ideas and administrative support – such as a bank. We select managers based on several criteria. We care about a high level of service, reasonable costs, and of course reliable results,” she says.