Sweden's Seventh National Pension Fund, AP7, is considering investing between SEK750m (EUR83m) and SEK1.5bn in private equity and hedge funds.
The SEK15bn fund is considering investing between 5% and 10% of its total assets in alternative asset.
If the fund decides to proceed with the plan to invest in alternative investments, searches for a consultant to assist them and fund managers will begin in the third quarter of this year. Daniel Barr, the fund’s chief analyst said that managers would probably be appointed at the start of next year.
Earlier this year AP7 switched approximately half the entire fund from passive to active management. Goldman Sachs Asset Management (GSAM) won a SEK1bn specialist European equities mandate and Carlson Investment Management to a SEK800m Swedish equities brief. French fund manager CDP Asset Management won a SEK1bn active European equities mandate; Schroder Investment Management was appointed to run a SEK400m Asia-Pacific ex Japan mandate; whilst Nomura won a $147m Japanese equity brief.
The rest of the fund was given to State Street Global Advisors (SSgA) to run on a passive basis. SSgA was appointed last September to manage the entire fund passively whilst searches for the five active managers were being conducted. SSgA's mandate, which comprises 52% of the fund, is equities in the Americas region.
AP7 was set up in 1998 as the default fund for those individuals who have chosen the government as their pensions provider in the new Swedish pensions system, as opposed to contracting with a commercial provider. AP7 comprises four million individuals, out of a total Swedish population of 8.5 million. The new Swedish pensions system allows individuals to invest up to 2.5% of their salaries into a pension.
By Geoffrey Ho
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