Stockholm-based Carlson Investment Management (CIM) has been awarded three balanced mandates totalling SKr328m (EUR36.2m) from Swedish local authority pension funds.
Danderyd, Simrishamns and Dalarnas Kommun have all awarded mandates worth SKr120m, SKr48m and SKr160m respectively to fund old liabilities.
Head of institutional marketing for the firm, P O Ost said that small to mid-sized pension funds tend to use balanced mandates due to a lack of in-house specialist asset allocation expertise.
He added that funds tend to place 40% in equities - divided almost equally between Swedish and non-Swedish equities - and 60% in Swedish bonds, with 20% in foreign currency and 80% managed in Swedish krona.
There are about 230 local authorities, but only 89 have pension funds, none of which are 100% funded and relate to pre-1998 pension liabilities. Ost does not anticipate any more local authorities establishing pension funds in the near future.
The ones that do not have funding are not that well off financially, added Ost. And with the new DC system I don´t see many new local authorities coming in to the market.
*A 1998 pension reform - PFA 98 - replaced the PAYG DB system, with a funded DC system for liabilities from 1998 onwards. The new system covers approximately 800,000 employees.
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