SWEDEN - The e15bn AP2 has appointed five new managers to run global tactical allocation mandates worth around US$2bn (e1.6bn).
The fund has hired Barclays Global Investors, Bridgewater Associates, First Quadrant, Goldman Sachs Asset Management and JP Morgan Investment Management. AP2 received applications from 18 investment managers.
Thomas Franzen (pictured), head of asset allocation said: “We plan to activate only two managers and the others will be stand-by managers. But we have not decided which managers we will activate. The two activated managers will start with a notional value of $1bn each and a tracking error of 7%.”
The GTAA mandates are absolute return mandates, run on an overlay basis using index futures and currency forward derivatives instruments.
Franzen explained: “This mandate is what we call derivatives overlay mandate, which means that $1bn is the notional value which acts as a base for position-taking in the futures market for managers.
“GTAA is part of our alpha portfolio i.e. part of our active portfolio. We think this is a cost efficient method of taking active risk and it is typically uncorrelated with most other active mandates.”
Meanwhile, AP2 is also expected to appoint bond managers to run an estimated e1.5bn-2bn of the fund’s portfolio later this year.
The fund is tendering for three different categories - global government/credit ex Asia, US government/credit and global credit ex Asia.
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