SWEDEN - Forsta AP-Fonden, the SEK148bn (e16bn) first Swedish national pension fund (AP1), is investing in private equity with the assistance of strategic partners, through three mandates worth e326m.
The fund is tendering for one or more strategic private equity partners, on a non-competing basis, to provide advice on global, US and European private equity mandates worth e81.6m to e163m each.
The move is part of AP1’s commitment earlier this year to increase its investments in private equity and look into hedge funds and real estate funds, as reported by International Pensions News in March.
“We have decided to have alternative investments in our portfolio to diversify risk and increase returns in the long-term,” said AP1 spokesperson Nadine Viel Lamare (pictured).
“Within these alternative investments we have private equity, we have real estate and we will have hedge funds.”
Currently, the fund has just one investment in private equity, made directly in Amaranth Capital, a fund that invests in Nordic small-cap equities, where it has committed a maximum of e75m.
“Last year we started defining a strategy for private equity and so far we have only made one investment,” Viel Lamare said.
“We are scanning the market to find other investments.”
Each private equity mandate is expected to be in the range of e81.6m to e163m for the first year the annual cap on commitments for the subsequent years to be discussed with the strategic partners on an annual basis.
“The private equity mandates to be considered are separate accounts on a discretionary basis, but with AP1 having the ability to veto,” the fund said in its tender notice.
“It is expected that the right of veto would be used infrequently and only for strategic overall portfolio allocation reasons, if at all.”
The role of the strategic partner is to include sourcing, evaluating, selecting and investing funds, ongoing management of funds, portfolio managing and reporting, advising AP1 on strategic outlook for private equity and detailed portfolio planning for the mandates and keeping the fund informed of issues within private equity markets.
The fund is being advised by Towers Perrin and deadline for tender is October 10.
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