SWEDEN - Första AP-fonden, the SEK 171.6bn (€18.4bn) first Swedish buffer fund, has awarded more than €4bn to Barclays Global Investors amid a scheme revamp that has seen it take more assets in-house.

BGI now runs SEK39.3bn (€4.2bn) in enhanced large-cap North American equities following a change to its four-year-old mandate. It previously ran SEK12.6bn in European and North American stocks, but the fund has now decided to run the European segment internally.

“BGI used to manage part of European and North American equities before,” said AP1 spokeswoman Nadine Viel Lamare. “We took all European equities in-house.” This involved transferring approximately SEK10bn in European assets away from BGI.

The fund now has its entire US large-cap equities portfolio with BGI. A BGI spokesman was not immediately able to comment.

“A major restructuring of the fund’s management mandates was completed in the first quarter of the year, after which all European equities are under active internal management and all North American equities have been assigned to external managers,” the fund said in its first-half report.

It has also emerged that UBS has lost an emerging markets brief worth around €964m, or 5% of AP1’s total portfolio.
IPE reported in February that the fund might pull the assets from a UBS structured product called Perle.

The fund has now named 12 new active emerging markets managers (see below), although they have not yet been funded, Viel Lamare said. Contracts haven’t yet been signed and there are some “transition issues” between the passive UBS brief and the new mostly active managers.

“The selected managers will give the fund good flexibility and portfolio diversification together with a high expected risk-adjusted excess return net of costs,” AP1 says on its web site. “The managers complement each other well in terms of investment styles and risk profiles and will thereby contribute to the diversification of the portfolio.”

AP1 posted a net investment income in the first half of SEK13.1bn – a return of 8.4%, which it said was “aided by rising stock prices, falling interest rates and a positive contribution from active management”.

“It is highly satisfying to be able to present investment income of SEK13.1bn and net assets of SEK171.6bn,” said SEK 700 million,” said managing director William af Sandeberg.

“In the first half of 2005 both internal and external management performed well and exceeded their respective benchmarks by a combined 0.4 percent, corresponding to SEK700m.”

AP1’s new emerging markets managers:

Aberdeen Asset Management (Active)
Alliance Capital Management (Active)
Barclays Global Investors (Passive)
Brandes Investment Partners (Active)
Capital International (Active)
Citigroup Asset Management* (Active)
Emerging Markets Management (Active)
Lazard Asset Management (Active)
Marvin & Palmer Associates (Active)
Merrill Lynch Investment Managers (Semi-passive)
PanAgora Asset Management (Active)
Vontobel Asset Management (Active)