Morten Christensen, Chief Financial Officer of Norwegian family office Aars, has effectively built the structure of the investment management of the family office from the ground up since assuming responsibility in 2016. While the current setup is relatively recent, the underlying capital base has a far longer history, rooted in the Møller family, best known for founding and controlling the second largest Nordic car import and retailing business since the late 1940s.
Before joining Aars, Christensen spent 15 years building and running an investment consulting business advising family offices, pension funds, and endowments, which was later sold to a wealth manager. It was through this work that he came into contact with the Møller family, laying the groundwork for what would become the current structure of the investment management in Aars. The initial phase involved working closely with the family’s four active owners to define investment objectives, including return targets, risk tolerance, and overall portfolio construction. While the investment function was initially fully outsourced, Christensen gradually built out an in-house investment process and team.
Today, approximately 75 percent of the group’s net asset values are invested in privately owned companies, reflecting the family’s long-standing industrial heritage. Christensen has structured the remaining capital of approximately NOK 6.4 billion into three liquidity-oriented sub-portfolios, including a multi-asset portfolio with exposure to alternatives such as hedge funds and trend-following CTAs.
A Three-Pillar Portfolio Structure
“Across the group, about 75 percent of our net asset value is invested in directly owned companies, which is inherently illiquid,” says Christensen. The remaining 25 percent represents the investment management business, which is structured across three distinct sub-portfolios. “One is a treasury portfolio focused on investment-grade assets. Then we have two risk portfolios: a Nordic large-cap equity portfolio that we manage in-house, and a multi-asset, absolute return-oriented portfolio investing across a broad range of asset classes and instruments,” he explains.
“One is a treasury portfolio focused on investment-grade assets. Then we have two risk portfolios: a Nordic large-cap equity portfolio that we manage in-house, and a multi-asset, absolute return-oriented portfolio investing across a broad range of asset classes and instruments.”
Morten Christensen
This multi-asset portfolio acts as a bridge between the low-risk treasury allocation, “the bank,” as Christensen describes it, and the higher-risk equity portfolio. “It plays the role between the treasury portfolio, which is the safest part, and the pure risk equity portfolio,” he explains. Within this multi-asset portfolio, the team maintains a high degree of flexibility, allocating dynamically across markets and strategies, including hedge funds, to optimize the portfolio’s overall risk-return profile.
Christensen has established a structured investment framework and policy guidelines that, together with return expectations and volatility targets, guide the asset allocation within the multi-asset portfolio. The process starts from the low-risk end of the spectrum, including money market instruments and investment-grade bonds, before extending into high yield, alternatives such as hedge funds and convertibles, more complex credit structures, and ultimately equities. “We cover the full spectrum,” reiterates Christensen. Portfolio construction is further shaped by rigorous stress testing, which plays a central role in determining how risk is deployed. “The way we expose the portfolio is steered by stress testing. We have a kind of floor thinking, what happens if everything goes wrong,” he explains. “The downside focus is very important.”
“The way we expose the portfolio is steered by stress testing. We have a kind of floor thinking, what happens if everything goes wrong. The downside focus is very important.”
Morten Christensen
Credit currently represents the largest allocation within the multi-asset portfolio, a positioning that has been in place for some time. “We are becoming a bit more cautious, but we still have a significant high-yield exposure, primarily in the Nordics, with some allocation outside the region as well,” says Christensen. This is complemented by an allocation to investment-grade credit to help moderate overall portfolio risk, alongside an equity exposure of roughly 10 percent. “Then we have alternatives, including hedge funds and a few other strategies, which account for around 10 to 12 percent at the moment,” he adds. “That allocation can vary somewhat over time.”
Systematic Strategies and the Role of CTAs
Within the hedge fund allocation of the multi-asset portfolio, Christensen and his team currently favor systematic strategies. “That is not to say we haven’t invested in other strategies historically, but at the moment our exposure is exclusively to systematic managers,” he explains. These include both pure trend-following CTAs and more diversified multi-strategy systematic approaches.
“That is not to say we haven’t invested in other strategies historically, but at the moment our exposure is exclusively to systematic managers.”
Morten Christensen
One strategy area Christensen has steered away from in recent years is long/short equity. “We don’t favor long/short equities too much, partly because we believe we can manage equity risk ourselves in a more active way,” he explains. “Many long/short equity managers tend to be long equities, short indices and be net long-biased. Hence, you end up paying too much for that exposure.” Instead, Aars prefers to adjust equity risk internally rather than outsource it to external managers. While the current hedge fund allocation is focused exclusively on systematic strategies, the portfolio has previously included exposures to areas such as special situations and credit long/short.
“Some are what you could call pure diversifiers, where you expect relatively stable and consistent positive returns.”
Morten Christensen
The role of each hedge fund varies depending on its strategy, he explains. “Some are what you could call pure diversifiers, where you expect relatively stable and consistent positive returns,” says Christensen. Trend-following CTAs, however, are valued for their convex return profile and ability to generate so-called “crisis alpha.” CTAs have played a prominent role in the multi-asset portfolio, with Christensen having followed the space for nearly two decades.
While the strategy can face more challenging periods in quieter market environments, particularly during the volatility-suppressed era of low interest rates, its value tends to emerge in more turbulent conditions. “Historically, and we have experienced this ourselves, when strong trends develop, such as in 2008 or in 2022 when interest rates moved sharply higher, they are very useful to have,” he explains. “When markets are under pressure, CTAs have typically been able to deliver strong returns.”
Disciplined Manager Selection and Portfolio Oversight
Christensen relies on external managers to build the multi-asset portfolio, applying a consistent selection process across asset classes. A key focus for him and his team is the manager’s investment philosophy and, more importantly, the consistency with which it is applied in practice. “You want to see an investment process that clearly reflects the stated philosophy,” he explains. Any deviation from that framework is treated as a warning sign. “If we see breaches or weaknesses in how managers operate relative to their philosophy and the process they have designed, those are clear red flags. That’s something we try to avoid,” Christensen adds.
“If we see breaches or weaknesses in how managers operate relative to their philosophy and the process they have designed, those are clear red flags. That’s something we try to avoid.”
Morten Christensen
When evaluating managers, Christensen places particular emphasis on how they have navigated more challenging periods. “We typically drill down into specific months, looking at returns, risk, and, importantly, what actions were taken during those periods,” he explains. “How did you operate when you faced challenges? That’s where you really learn about the process.” The manager selection process, therefore, combines both quantitative and qualitative elements. “It’s obviously quantitative, but also very qualitative,” he adds. “Over time, with experience, we have developed a good sense of how to identify quality managers.”
Christensen emphasizes that Aars takes a patient approach to fund allocations, even during periods when returns deviate from expectations, but “only as long as we understand it.” If the team observes changes in a manager’s philosophy, significant shifts in the team, or alterations in risk management, “we have no problem exiting,” he says. At the same time, he stresses the importance of maintaining close, but not overly close, relationships with managers. “We don’t want to get, in a way, ‘married’ to the management teams,” Christensen explains. “If you get too close, over time it becomes more difficult to redeem and to have honest discussions during challenging periods.”
