Stefnir

Stefnir is Iceland’s largest fund manager with assets of approximately ISK 331 billion under active management. The company is wholly owned by Arion Bank and is based at the Bank’s headquarters. The assets under management are owned by a diverse group of investors, from private individuals to Iceland's largest institutional investors. The fund members’ assets are invested in mutual funds, investment funds or institutional investor funds, and Stefnir has also entered agreements with a number of partnerships limited by shares. Stefnir had 21 employees at the end of 2018.

Assets distribution is good and the company’s revenue structure is in line with the board's objectives.

Assets under management decreased by approximately ISK 16 billion, from approximately ISK 347 billion to ISK 331 billion. The main reason for this was payments from alternative investments in connection with the completion of investment projects, and redemptions in the investment funds Stefnir ÍS-15 and the downscaling of Stefnir Liquidity Fund. Stefnir - ÍS 15 remains nevertheless by far the largest domestic equities fund in Iceland. The company's focus on developing alternative investments in recent years has yielded more diverse income streams and a higher margin. Asset distribution is good and the company’s revenue structure is in line with the board's objectives.

Stefnir Fixed Income Opportunities trebled in size in 2018

Stefnir's inflation-indexed products proved most attractive to investors in 2018. This was demonstrated most clearly by the investment fund Stefnir Fixed Income Opportunities, which invests in bonds issued by a diverse group of issuers, such as public authorities, companies and financial institutions, which grew from ISK 2.2 billion to ISK 7 billion during 2018. At year-end 83% of the fund’s assets were inflation-indexed. Returns on Stefnir’s fixed income funds were good and clearly vindicate World Finance Magazine's nomination of Stefnir as Iceland’s best investment management company in fixed income.

Stefnir named Iceland’s best investment management company in fixed income for second year in row

Stefnir was named by World Finance Magazine as Iceland’s best investment management company in fixed income. The award is given to asset management companies which have achieved excellent results despite the challenges presented by a volatile operating environment. In Stefnir’s case, the key factors cited were long-term results, risk management and internal corporate governance.

Responsible and diverse investment options and thorough disclosure of information are central to the corporate social responsibility to which Stefnir is committed.

Responsible investments and the role of Stefnir

Stefnir’s role is to manage clients’ assets as best serves their interest. Responsible and diverse investment options and thorough disclosure of information are central to the corporate social responsibility to which Stefnir is committed. By paying due attention to environmental and social issues and good corporate governance we believe we can have a positive influence on our society, to the benefit of fund members and other stakeholders. The board of directors of Stefnir established a policy on responsible investments for Stefnir funds in December 2018 and it will be implemented in 2019.

Strategy and corporate governance

During the year the employees and board of directors worked hard on defining the company’s core competences and focuses over the next few years. The company has a clear strategy and the board has set a performance benchmark for the company which is measured on a regular basis. The board of directors of Stefnir is committed to good corporate governance and endeavours to promote responsible behaviour and corporate culture within Stefnir for the benefit of all the company’s stakeholders.

The company publishes a corporate governance statement on its website once a year, describing its activities and its focuses in the near term. Transparency is paramount and this is reflected by the keen focus on detailed fund information on the company's website. This disclosure of information is far more extensive than legally required.

Leading private equity investor in Iceland

Stefnir has been a leader in private equity investments and alternative investments in Iceland for many years. There is an obvious appetite for a diverse range of investment options and Stefnir has met this demand with a variety of products suited to institutional investors' portfolios. Stefnir operates and manages both Icelandic and international private equity funds and the major owners of the funds are pension funds, insurance companies and other financial institutions. During the year Festi was sold to N1, bringing to a conclusion the association between SFV, a company managed by Stefnir, and Festi. The transaction was paid for with cash and shares in N1. SÍA III acquired an interest in the machining company Hamar and the pharmacy Lyfja.

Access to international markets through Stefnir funds

Stefnir occupies a strong position as a manager of international equity funds in Iceland. The company employs an experienced team of experts to monitor economic developments and international listed companies and their approach to fund management has long attracted attention. International funds managed by Stefnir are an attractive option for diversifying risk for Icelandic investors and savers.