Sweden’s AP1 has invested SEK300m (€28.5m) in a private equity fund commited to aligning with the UN Sustainable Development Goals (SDGs).

Swedish private equity firm Summa Equity, the fund’s manager, said it had closed its second fund with investor commitments worth SEK6.5bn.

The Stockholm-based company said the fund – Summa Equity II – would invest in Nordic and European companies working for solutions to global challenges.

These included core elements of the SDGs: ageing demographics, movement of people, resource scarcity, population growth, climate change and technology disruption.

Jan Rådberg, portfolio manager for private equity at AP1, said: “AP1’s overriding goal is to deliver the best possible return on pension savers’ money. We are convinced that one way of achieving this goal is by considering sustainability aspects in our investment decision process.

“We seek investments that are characterised by sustainable value creation. We are therefore excited to invest in Summa Equity, and look forward to a close and fruitful cooperation.”

Summa Equity said it was one of the first private equity companies to commit to the SDGs, aligning its investment strategy with the SDG framework.

Reynir Indahl, managing partner of Summa Equity, said: “Some of the leading global investors are not only continuing to invest in us, but also increasing their investment in Fund II. This confirms that investors increasingly recognise that companies that incorporate solutions to environmental, social, and governance challenges will show stronger growth and returns, while having lower risk. They are more future-proof.”

According to its 2018 annual report, AP1 had 5.5% of its SEK324bn portfolio invested in private equity or private equity funds.