SWEDEN - State Street Global Advisors (SSgA) has lost out on SEK31bn (US$4.6bn) as part of the seventh AP fund's (AP7) passive management shake up.
SSgA had run AP7's global passive exposure until the fund decided to diversify its exposure to include Northern Trust and Handelsbanken.
Richard Grottheim, executive vice president at AP7, said SSgA’s loss was not a result of poor performance: “We have to retender every five years and as our assets have increased from SEK15bn to SEK85bn in six and a half years, we felt it was right to diversify our passive exposure through various managers and therefore manage the risk.”
According to AP7, SSgA had previously managed all its passive investment, but following this shake up, has now only been awarded a third of the portfolio for US, European and Swedish investments.
This reallocation saw SSgA left with SEK15bn (US$2.2bn) to manage across the three regions.
As part of the shakeup, Northern Trust took the remaining two thirds of the US and European portfolios, totalling SEK20bn (US$3bn).
Handelsbanken, another newcomer to AP7, took the remaining Swedish exposure of SEK11bn (US$1.1bn).
Grottheim also confirmed the fund would announce the winners of Japanese and Asia-Pacific mandates in about two weeks’ time. Each mandate will be worth SEK3.7bn (US550m).
SSgA was unavailable for comment as Global Pensions went to press.
PTL has appointed Karein Davie as a client director in its Birmingham office.
The level of interest rate hedging increased to £29.5bn of liabilities in the second quarter as pension funds continued to de-risk, according to BMO Global Asset Management's research.
UK inflation has risen for the first time since November to 2.5% in July, up from 2.4% in June, thanks to rising fuel costs and the price of computer games.
The number of DB pension scheme trustees targeting a buyout with an insurer has increased significantly in the past five years, latest research from Willis Towers Watson shows.