How we invest
For us, sustainability is not something on the side of management – it is integrated into the thorough company analysis that is at the heart of our management.
The Lannebo way
At Lannebo, it is the managers who do the sustainability analysis. This creates a deep understanding and insight into the companies we invest in. It also makes it possible to encourage the companies in the right direction while working for the highest possible risk-adjusted return.
We are convinced that companies that take responsibility for people and society, that understand their environment, its risks and its opportunities, have a greater chance of long-term profitability and thus also a greater potential to generate a good return for our customers at a lower risk. That’s why we follow a proprietary and successful methodology when sourcing investments for our funds.
1. Finding the right company
The market consists of thousands of companies and we put all our focus on finding responsible companies that we believe will be able to give our unitholders the best possible return. Our company analysis is central to identifying companies with long-term sustainable business models and that are positioned for the future. In some industries, the sustainability risks are considered to be so extensive that Lannebo wants to minimize the funds’ exposure to these, therefore we apply exclusion criteria.
2. First selection
In the first selection, we identify, for example, companies with good profitability in an interesting sector or with a promising product, companies that have the solution to a problem or that are market leaders in their niche.
3. Thorough company analysis
It is always our fund managers who carry out the company analysis, sustainability analysis and make decisions on the actual investment. A commitment that creates an invaluable knowledge and insight into the companies we invest in. In the sustainability analysis, the manager analyzes and assesses about fifty points. The manager then rates how the companies handle governance, environmental and social issues such as diversity, labor law and gender equality. The companies must prioritize long-term sustainable development and have a place in the market in the future. For our fund managers, it is important that they understand how the business is fundamentally structured: corporate governance, corporate culture, market position, strategy. For us, this is the very essence of genuine, active management. Our fund managers see opportunities and risks that an index manager or robot can never do.
4. External sustainability check
In order to further ensure that the investments live up to our high sustainability requirements even outside the internal company analysis, we use world-leading Sustainalytics to perform a company check on the company in question. For example, Lannebo does not invest in tobacco, cannabis, alcohol, gambling, pornography, weapons, fossil fuels or companies that systematically and extensively violate international conventions. These exclusion criteria are something that is checked in the external sustainability control.
5. Investment decision
When the company analysis is completed, the fund managers make an investment decision. However, before an investment can be made, the fund managers must apply for the company to the risk manager who also performs checks to ensure that the company lives up to Lannebo’s set sustainability requirements.
6. Ongoing monitoring and continuous positioning
Every day, investment decisions are evaluated. Do we still want to be invested in this company? Is the company developing as we wish? If not, we sometimes have to sell the holding for the benefit of the shareholders.
7. Company visits and dialogue
Real change comes from investors engaging in the companies and using their ownership power. As a major owner in many companies, Lannebo has the opportunity to influence and contribute to change. We use this opportunity proactively as well as reactively by having a continuous dialog with companies where we have holdings. Each year, Lannebo conducts a number of structured sustainability meetings with management in selected companies to discuss their sustainability work. These meetings are prioritized as we believe that they have an effect in the companies while providing us with a broader basis for the investment analysis. In cases where we consider it appropriate, we can also collaborate with other investors to create the greatest possible impact.
8. Nomination committee and General meeting
Lannebo is a major owner in many Nordic companies, which entails a responsibility and an opportunity to influence the companies, not least through nomination committees. We participate actively to ensure that the companies have as knowledgeable, diverse and equal boards as possible. Our main principle is to participate in general meetings where we are a major shareholder, and we vote at general meetings in just over 60 percent of our managed assets. For us, this ownership work is an integral part of active management.
Sustainability always starts with corporate governance. Why is it so important to be an active owner - and how can we as investors contribute?
Reports and policies
Read our policy for responsible investments, shareholder engagement principles, annual sustainability report and climate report.