SWEDEN – Första AP-fonden, the 148.1 billion-crown (16 billion-euro) first Swedish buffer fund, says it can’t rule out the possibility of hiring more external asset managers – and that it has set up a new external management unit.
The comments come as the fund said it was “dissatisfied with” the return on listed assets in the first half that was on a par with its strategic benchmark.
“The number of external management mandates is now 14, of which 13 for equities and one for fixed-income securities, and I would not rule out the possibility that this share will continue to increase,” said managing director William ad Sandeberg.
“We have therefore set up a new unit with overall responsibility for external asset management,” he said in the scheme’s half-year report. “Among other things, the unit’s tasks are to select, carefully monitor and continuously evaluate fund managers in order to maintain a high return in relation to management costs.”
The new unit would be headed by Rickard Kjorling, who joins from SEB Asset Management in September.
External asset managers currently run 24% of the fund’s total portfolio. “In order to meet the fund’s goals in ongoing asset management, we are striving to raise the share of investments that are managed actively,” af Sandeberg said.
He said it was “highly gratifying” that many of AP1’s external mandates showed “excellent development”. He added: “In many cases it is preferable for active management to be carried out by external managers
AP1 returned 5.5% in the first half of 2004 - on par with its strategic index - boosted by a 17% return on Swedish equities.
Elsewhere in Sweden, occupational pensions firm Alecta said its total return for the first half of 2004 was 4.9%.
“The main explanation for this favourable return is a total return on equities of 9.3%,” it said. “At the same time, Alecta’s property strategy enjoyed continued success with primarily the foreign holdings performing well.”