Old school New England 92 - Scanorama

Illustration: Per Dybvig
Founding father and inspiration behind SKAGEN’s investment philosophy, Kristoffer Stensrud
Stavanger is also an entrepreneurial
place, however. So it should be no
surprise that it was here in 1993 that
four business friends and long-term
finance-industry veterans - Tor Dagfinn
Veen, Kristoffer Stensrud, Åge Westbø
and Geir Tjetland - decided to take on
the big Norwegian banks and create
their own fund management firm.
All the founders remain active players
in SKAGEN, and are as attached to their
West Coast home and Nordic sensibilities
as they ever were. Then, as now,
it was the investing genius and philosophical
approach of Stensrud, which
propelled the company forward.
Swedish business magazine Dagens
Industri, describes Stensrud as the
Equity Hippie (“Aktiehippien”). With his
ponytail, sockless feet, and interest in
Feng Shui he cuts an unlikely figure as
an international investor. But it is his
unusual approach to life which his colleagues
believe allows him to recognise
the qualities in companies which others
do not or cannot. He is regarded in the
company as the “Syvende Far”
– a Norwegian fairytale character,
loosely translated as the founding
father.
And while there were months at the
beginning when the founders did not
take a salary, Stensrud’s concentration
on undervalued, unpopular and under-
researched stocks meant clients were
still getting hefty returns. But that was
never quite enough for Stensrud. As
a child of a family of hoteliers, it had
always irked him that the finance
industry did not have the same attachment
to client servicing and open
communication, as the hospitality
market did. He sought therefore to also
put this at the centre of the company’s
ambitious vision: to become the world’s
best fund management company
measured in terms of risk adjusted
returns, service, and client communication.
Now, almost 20 years later, with assets
under management of €12 billion, 35%
of the Norwegian equity fund market
and a growing market share in Sweden,
Denmark, the UK and the Netherlands,
SKAGEN can hardly be described as
a small player. But with its measured
international growth, it remains a global
minnow. Ironically, however, the philosophical
attachment to open communication
and transparency, conceived
out in this financial backwater, actually
puts the company in the vanguard of
financial good practice.
With the current hostility to baffling
financial products, SKAGEN believes
that its straightforward, plain vanilla
equity funds are a refreshing change. As
Westbø says, “This is all we do. And we
only offer funds which we would be
happy to invest in ourselves.” The
decision to publish the entire holdings
of each of SKAGEN’s funds each month
as well as the business case behind any
new acquisitions, means clients can
always be confident about where there
money is going and how it is performing.
And SKAGEN’s focus on maintaining
its own distribution network with
competent client advisors means that
the company’s 160 000 or so direct
clients can be sure of receiving close
and professional service and follow-up.
In response to client demands rather
than any plan for world domination,
SKAGEN has gently pushed out into
new markets. Less than 50% of its
client base is now in Norway (see
graph). But the owners are clear that as
the company expands internationally
it will retain that same common sense
Norwegian philosophy that has served
it so well in the past.
MEASURED INTERNATIONAL GROWTH
Netherlands 8%
Denmark 6%
Sweden 28%
UK 7%
Others 4%
More than half of SKAGEN’s assets now come from
outside of Norway
Norway 47%