The offering within Catella’s Equity, Hedge and Fixed Income Funds
business area runs from systematically managed, global macro strategies to
local, actively managed funds through the now minority-owned Mutual Funds
business, part of which was sold during the year. Operations are defined by a
long-term approach based on fundamental values to generate good returns over
time for its clients.
Catella’s operations in Equity Hedge and Fixed Income Funds are divided into two service segments: Systematic Funds and Mutual Funds.
As an aspect of the current strategy to concentrate the business on property investments, Catella decided during the year to slim down Equity, Hedge and Fixed Income Funds. Catella sold 70 percent of Mutual Funds during the year in the form of Catella Fondförvaltning ab to Athanase Industrial Partners for cash consideration of sek 140 million. In conjunction, Catella entered into
a strategic partnership with the buyer aimed at further developing and enhancing the client offering.
Systematic funds invests globally
The Systematic Funds business is run through Informed Portfolio Management (IPM), a company in which Catella owns a 60.6 percent interest. IPM is a systematic investment manager known for its macro strategy that primarily attracts capital from institutional clients in the US, Europe and
Asia. The investment process is entirely systematic and diversified in terms of strategies, asset classes and individual instruments. The funds invest globally, primarily in liquid securities in the currency, fixed income and equity markets.
The past year
Assets under management within Systematic Funds amounted to sek 14.2 billion (41,9) at 31 December 2020 and income for the year amounted to sek 375 million (576). The product performed below expectations in 2020 and the company is facing a very challenging 2021 on both the cost and management sides.
Outflow for several years
2020 was a difficult year for Systematic Macro in several ways and the large outflows of assets under management at Systematic Funds continued during the year. This is due partially to persistent underperformance, although the majority of the outflow is attributable to a global shift away from systematic
macro during a turbulent and unpredictable year. The fund’s investments in highly liquid instruments make it easier for investors to withdraw capital to manage short-term liquidity shortfalls in times of crisis, which also occurred in 2020.
Development of Systematic Macro
Several changes were initiated in the Systematic Macro management model during the year, aimed at enabling higher returns to the fund’s clients. The standards for the factors in the model were raised during the summer with regard to Systematic Macro, leading to the phase-out of some of the comparatively weaker factors. In parallel, Systematic Macro was expanded with a bond model. A commodities model was also added during the
year that covers a wide group of commodities, both with relative and direction-based positions. Catella is working actively to reduce costs to a more appropriate level and from this point of departure, the company is now
moving towards greater concentration on creating new products for international investors with a global focus.