Major Nokia shareholder keeps low profile
Capital Group does not seek commanding position
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Capital Group, an American asset management company that became the largest single shareholder in Nokia last week, does not plan to take an active role in the company's decision making.
On Friday, the company, which manages a gigantic investment portfolio of EUR 870 billion, announced that its ownership in Nokia had risen to more than ten per cent.
Nokia's ownership has long been very dispersed, and the voice of the shareholders has not been directly reflected in matters such as the composition of the Board of Directors. In spite of its large slice of Nokia shares, Capital Group does not plan to change this.
"We are not seeking decision-making power with our investments, and we do not try to unduly influence the actions of the management of the companies", said Capital Group representative Simon Levell.
Levell adds, however, that his company takes its rights as a shareholder seriously, and sometimes uses its votes at shareholders' meetings to go against plans by the companies that it owns.
According to the database of the United States Securities and Exchange Commission, one fund inside Capital Group, which was represented at Nokia's shareholders' meeting last year, opposed a proposal by the company's management to raise more capital through a share issue.
In many other companies, Capital Group funds have opposed measures to increase the use of corporate shares as incentives for management.
"We vote according to what we feel is in the best interests of long-term owners. However, we are not seeking seats on the appointment committee, for instance", Levell says.
Capital Group nevertheless does influence the activities of corporate management, and the issues that are brought before the shareholders' meetings behind the scenes. As a long-term major investor, Capital Group maintains close contact with the managements of companies, and brings out its views in these conversations.
The views of a major investor undoubtedly has some effect on the actions of a company's management.
The fact that Capital Group raised its holding in Nokia to more than ten percent was partly a coincidence, and not a result of any concentrated strategy.
"Investment decisions with us are made in a dispersed manner: every fund and customer account has several portfolio managers, who make investment decisions independently", Levell says.
Capital Group's 10 per cent stake in Nokia is worth more than EUR 7 million; nearly one per cent of the savings of many US pension accounts are tied to Nokia.
Capital Group also has a large stake in the Finnish paper company UPM.
Most foreign mutual funds and investment companies use their power at shareholders' meetings through powers of attorney. They can voice their views on matters put before a meeting in advance through Citibank, which is the bank that Nokia uses in its foreign dealings.
This means that in Finland, Nordea Bank represents companies at shareholders' meetings. Nordea's representative votes on matters before the meeting on the basis of the proxies that it is given. The owners themselves also have the option of sending their own representatives, if they see a reason to do so.
Helsingin Sanomat
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| 27.2.2007 - TODAY |
 Major Nokia shareholder keeps low profile |
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