BlackRock’s Peter Nielsen notes that his firm’s move to open an office in Copenhagen reflects a growing business and demand for local servicing, rather than a new bet on the region.
BlackRock’s Peter Nielsen notes that his firm’s move to open an office in Copenhagen reflects a growing business and demand for local servicing, rather than a new bet on the region.
BlackRock has been doing business in the Nordic region for more than ten years. The company itself has changed considerably in that period, especially as it grew retail and institutional products and services, while adding another dimension through the acquisition in 2009 of iShares, the ETF provider.
The main attraction of BlackRock, according to head of the Nordic region Peter Nielsen, is that it has a broad offering from a big global company, with a growing book of business in the region. The idea is to service clients locally with global capabilities.
BlackRock needs to be in both Stockholm and Copenhagen, Nielsen says. As to when offices in Helsinki and Oslo may be added, he says, time will tell.
Nine appointments this year have taken the Nordic team to 19, including Herman Prummel as COO for Nordics and Geir Espeskog as head of iShares for the region.
Clients have also changed, in terms of the opportunity they present to BlackRock. "We know who the clients are and need to be close to them," Nielsen says.
One area of opportunity is in products that can assist with what are considered uncertain times, with higher levels of volatility.
Clients want solutions to deal with this, he says, and the presence of uncertainty is exactly the time to talk to clients, not hide away from them.
There are local trends to address, such as demand for emerging markets exposure through both debt and equity.
In addition, Nielsen says regulation is also driving business. For example, Solvency II is not particular to the Nordic region, but clients have to adapt nonetheless.
Variations
Nielsen picks currency as the key variation between markets in the region. Finland has the euro, therefore the focus is very much on domestic fixed income in each of the Swedish, Norwegian and Danish markets.
Currency assets are an interesting aspect of the industry, he adds. The interplay between local and global is another.
BlackRock comes to the region as a global player. This means the products it brings with it are not going to be the same as those offered by domestic manufacturers.
For example, BlackRock does not offer Swedish or Danish fixed income products, instead pitching global fixed income or global high yield.
Nielsen says his experience is that investors are looking to diversify and that a global angle may be something that they are looking to add to existing portfolios.
However, BlackRock would not turn down an opportunity to make some more local acquisitions.
If there were an opportunity to participate through local production, then it would be happy to consider this.
There are no current plans to execute such strategy, but then again such opportunities can spring up unexpectedly, Nielsen adds.
He sees a trend for more interest from smaller distributors as a result of greater local presence.
This includes smaller banks or savings banks, which are country specific, looking to global, diversified products.
Over the next six months, Nielsen will be engaging ever more with clients. "That closeness is important. Clients are seeking information."
www.blackrock.com
