SWEDEN - AP3, Sweden's third National pension fund has hired Prudential Investment Management to manage a US$659m (SEK6.4bn) active corporate bond mandate as the fund shifts from indexed to active management. The brief was previously held by State Street Global Advisors (SSgA) on an indexed basis since the fund's inception in January 2001.
Commenting AP3’s chief investment officer Niklas Ekvall said: “AP3’s strategy is to hire external asset managers where these can be expected to succeed better than our own internal managers, which is very much the case with US corporate bonds.
“In addition, this is a sub-market where one can expect active management to add value. It has therefore been essential to find an active manager for this asset class.”
The mandate will be benchmarked against the US section of the Merrill Lynch Global Large Cap Corporate Index.
The fund is also looking to tender an active US equity brief. Ekvall added said that AP3 may tender a combined small- and mid caps brief.
Earlier this year AP3 said that commitments to active US stocks could mean the slashing of a SEK19bn US passive equity mandate held by Merrill Lynch Investment Managers.
By Madhu Kalia
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