One of the world's richest corners has become a magnet for a growing number of Wall Street firms.
The Nordic countries — best known for their universal welfare models and domination of world happiness rankings — now have a surplus of cash after years of central bank stimulus. That's prompting banks worldwide to line up with advice on everything from money management to mergers and acquisitions.
J.P. Morgan Chase, Goldman Sachs Group and BNP Paribas have all recently announced they're either expanding existing operations or creating new offices in the Nordic region. Many of them are interested in hiring locally to build a presence.
"We see an opportunity locally to grow our investment banking and private banking business organically," said Klaus Thune, co-head of Nordic banking at J.P. Morgan, which has about 40 bankers in London handling the Nordic corporate market. "There are a lot of new M&A mandates coming through."
Eirik Winter, chief executive officer in the Nordics at BNP Paribas, said the region's appeal lies in its "tendency to grow a bit faster than the rest of Europe and in some cases even faster than the U.S."
And big U.S.-based investment managers are also turning to the region. Neuberger Berman recently opened an office in Stockholm, while Nuveen added to its presence in Scandinavia by creating an office in Copenhagen.
J.P. Morgan said it's relocating bankers to the Nordic region. It also wants to hire as it tries to expand a portfolio of ultrahigh-net-worth clients, and do more investment banking. Goldman Sachs, which already has a Nordic base in Stockholm, will open an office in Copenhagen in April, starting with about 10 people.
Pension funds in particular are desperate for investment ideas as entrenched negative rates and high stock valuations push the industry into increasingly risky corners of the asset market. Many are relying more than ever on so-called alternative investments, which tend to be illiquid and difficult to price.