SWEDEN - AP1 will make 20 employees redundant and change its management model in an attempt to increase the focus on strategic asset allocation, which the fund considers its core activity.
This follows a 21.9% decline in its assets during 2008.
AP1 managing director Johan Magnusson said: "We want to raise the level of ambition in strategic asset allocation, which has the greatest influence on the fund's ability to deliver long-term returns and have therefore decided to make this change."
The fund intends to mobilise its management around the common goal of boosting its total return through a stronger focus on strategic asset allocation.
In connection with this, the fund's previous organization for active management will be decreased in size.
According to the AP1, this will enable it to simplify its management model, reduce the number of transactions and create the conditions for a higher total return in the long term.
The fund's chairman Anna Hedborg said: "We must naturally draw our own conclusions from the global financial crisis that has severely impacted our own earnings.
"A shift in the fund's strong research capacity in order to increase the focus on mid and long-term investment decisions is therefore necessary and will also reduce our overall operating expenses."
Magnusson explained AP1's studies and analyses showed decisions about the portfolio composition affected more than 90% of the fund's total return - while active management would at most contribute the remaining 10%.
He concluded better decisions at the strategic level would have a higher impact than even the outcome of exceptionally successful stock picking. He added the right portfolio composition would also improve their ability to weather out tough times in the financial markets.
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