Skandia benefits from Old Mutual backing

Sustained by a customer-focused approach, Skandia has become one of the leaders in Colombia’s voluntary pensions market

February 17, 2012

Skandia Pensiones y Cesantías in Colombia is a wholly owned subsidiary of the Old Mutual Group, providing retirement solutions through mandatory and complementary retirement and long-term investment funds. In Colombia, Skandia has over 15 years of experience in asset management. The company focuses on providing investment advice to its customers, pared with a suite of investment portfolios that serve the needs of its customer segments via managed portfolios and open architecture funds.

Skandia is one of the leading providers of long-term savings solutions, offering savings and investment products both for individuals and corporations, through four different businesses. One of these four businesses, Skandia Pensiones y Cesantias, has a wealth of experience in managing retirement offerings for individuals and also in structuring and implementing savings programmes for companies and their employees. This is done through four investment vehicles: mandatory pension, complementary pension, alternative and severance funds.

The complementary fund allows customers to supplement their mandatory pension with voluntary contributions to meet specific savings goals. Today, Skandia offers the widest range of investment products in the market to meet the needs of its customers.

Skandia worldwide
Since 2006, the Skandia Group has been part of Old Mutual plc, a South African long-term savings, protection and investment group, based in London. Old Mutual operates in Europe, Africa, the Americas and Asia, and serves more than 15 million customers.
Old Mutual’s Long-Term Savings division offers life assurance, pensions and investment products. It operates through three divisions: emerging markets, retail Europe and wealth management. Skandia Colombia is part of Old Mutual’s emerging markets division.

Voluntary pensions leader
In Colombia, Skandia is the leader in voluntary pensions. It was the first complementary fund in Colombia (1993) and has the market leading position in assets under management among the pension administrators market. Skandia is known for its broad portfolio diversification and top performance under risk mandates. Skandia allows clients to choose a specific asset class or a diversified portfolio with a defined risk profile.

Skandia can develop and implement alternatives that allow its clients, according to their risk profile, to invest in a range of different products to complement their existing portfolio.

The company has launched innovative investment alternatives, with broad investment platform portfolios comprised of stocks, bonds, structured notes, alternative investments, regions and currencies. It offers a robust investment platform, with access to an array of asset classes, local and international, and more than 22 portfolios to choose.

Skandia Pensiones y Cesantias has a highly qualified asset management team, in which investment and risk management experts look forward to providing the best solutions. Skandia has been qualified by Fitch Ratings Colombia SA, Securities Rating Company, with M1 – Superior since 1999.

This team is complemented by a trained sales force certified by AMV, the self-regulating Securities Market; this is an important professional achievement for those working in the financial services industry. In addition, Skandia has its own university (Skandia University) which operates as a training centre designed exclusively to strengthen the skills and expertise of Skandia distributors. This gives Skandia clients, who receive support and guidance from a certified counsellor, the assurance that they are being advised by professional advisers who operate to the highest ethical standards.

Skandia is known in the Colombian market for its customer-centric approach, its innovative products and its pioneering work to strengthen and professionalise financial advice.

Disciplined investment process
Skandia has implemented a thorough asset allocation and investment process across all its portfolios, so that it can avoid the short-term trading trap and each asset class has an appropriate risk level. Each of the portfolios has a risk/return profile and they are maintained independently of any given market environment. A comprehensive programme to educate its clients on which portfolios mix is the most efficient given their risk aversion and future needs has been developed for the past five years so that long-term risk adjusted returns are optimised for each client, and there is more involvement by them in their investment decisions, creating a strong bond with the company.

The investment team supports its decisions on a robust research and analytics department. Though external research is always welcome, Skandia has built models (both fundamental and technical) for various markets and asset classes that support a high quality decision-taking process. New investments, like structure notes and private equity stakes, are carefully analysed by a team built from different areas (front and middle office, legal and research) so that every aspect is considered.

Finally, the middle office is in charge of controlling limits for each portfolio that is managed by Skandia. Aspect from limits by bond or stock issuer, VaR limits, to counterparty and operational risks are monitored by the area. They have built their own models and, it is fair to say, they have dodged some bullets, as they hedged their Lehman exposure before its bankruptcy and some other local counterparties in recent months.